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Company XYZ has the following sales budget: Month Cash Sales Credit Sales September $100,000 $200,000 October $125,000 $190,000 November $140,000 $240,000 December $135,000 $185,000 Collections of credit sales are 50% in the month of sale, 40% in the month following sale, 10% two months following sale. No uncollectible accounts are expected. What is the expected balance in Accounts Receivable on November 30th

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letmeanswer

$110000 is the expected balance

Explanation:

Month    Cash Sales  Credit Sales     Collections

Sept        100,000       200.000         [tex]200,000 * 50 \%=100,000[/tex]

OCt        125,000      180,000    [tex](180,000 * 50 \%)+(200,000 * 40 \%)=170,000[/tex]

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 380,000    less   270,000 = 110,000 accounts receviable bal on Oct 31

Money Sales:  

In the event that the deal is for money, it happens when the products or administrations are given in return for a quick installment whether in term of notes, coins, check or Mastercard  

Credit Sales:  

On the off chance that the deal is on layaway, the business will give deals solicitations for the products or administrations provided indicating subtleties of the merchandise or administrations provided, the measure of cash owed by the client and the TERMS OF PAYMENT eg: installment mentioned inside seven days or inside 30 days,etc)  

No noncollectable accounts are expected by the company.,so., expected balance in Accounts Receivable on November 30th is $139,000

Explanation:

The collections of credit sales are 50% in the month of sale, 40% in the month following sale, 10% two months following sale.,according to this criteria September credit sales outstanding had been collected. October outstanding balance of $19000 stands in November., also the outstanding balance of November is $120,000 ($240,000/50×100) so., totally the expected balance in Accounts Receivable on November 30th is $139,000.