Leak Company sells only on credit.It reported the following information for 2016: $$\begin{array} { l l l l l }
& \underline { \text { September } } & \underline { \text { October } } & \underline { \text { November } } & \underline { \text { December } } \
\text { Budgeted sales } &\$900,000&\$800,000&\$850,000&\$960,000
\end{array}$$ Customer amounts on account are collected 45% in the month of sale and 55% in the following month.How much is the November 30, 2016 budgeted Accounts Receivable?
A)$467,500
B)$382,500
C)$827,500
D)$528,000

Question

Leak Company sells only on credit.It reported the following information for 2016: $$\begin{array} { l l l l l } 
& \underline { \text { September } }  & \underline { \text { October } } & \underline { \text { November } }  & \underline { \text { December } } \
\text { Budgeted sales } &\$900,000&\$800,000&\$850,000&\$960,000
\end{array}$$ Customer amounts on account are collected 45% in the month of sale and 55% in the following month.How much is the November 30, 2016 budgeted Accounts Receivable?
A)$467,500
B)$382,500
C)$827,500
D)$528,000

Quizplus · Accepted Answer

November budgeted sales are $850,000. 45% of this amount is collected in November ($850,000 x 0.45 = $382,500). 55% of this amount is collected in December ($850,000 x 0.55 = $467,500). The budgeted Accounts Receivable at November 30, 2016 is $382,500 + $467,500 = $827,500.

Leak Company Sells Only on Credit Customer Amounts on Account Are Collected 45% in the Month