Leaverton's forecast of sales is as follows: July, $60,000; August, $90,000; September, $130,000. Sales are normally 80 percent cash and 20 percent credit in any month. Credit sales are collected in full in the following month. Merchandise cost averages 60 percent of sales price. The company desires an inventory as of September 30 of $52,000. The inventory as of June 30 was $25,000. The July 31 balance of accounts receivable will be
A) $12,000.
B) $48,000.
C) $18,000.
D) $0.

Question

Quizplus · Accepted Answer

The credit sales for July are 20% of $60,000, which equals $12,000. These credit sales will be collected in August, so the accounts receivable balance on July 31 will be $12,000.

Leaverton's Forecast of Sales Is as Follows: July, $60,000; August