Asked by
Mc2000 Sweeny
on Dec 17, 2024
Verified
As of January 1 of the current year, Gunner Company had accounts receivable of $50,000. The sales for January, February, and March were $120,000, $140,000, and $150,000, respectively. Of each month's sales, 20% are for cash. Of the remaining 80% (the credit sales) , 60% are collected in the month of sale, with the remaining 40% collected in the following month. The accounts receivable balance as of March 31 is
A) $72,000
B) $48,000
C) $58,720
D) $60,000
Accounts Receivable
Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.
Credit Sales
Transactions where goods or services are provided to a customer with an agreement to pay at a later date.
Cash Sales
Transactions in which goods or services are paid for with cash at the time of the sale.
- Acquire insight into the effects of credit sales policies and collection efforts on cash flow.
Verified Answer
HK
Learning Objectives
- Acquire insight into the effects of credit sales policies and collection efforts on cash flow.