What is the budgeted accounts receivable balance on May 31?

A) $56,000
B) $64,000
C) $76,000
D) $132,000

Question

What is the budgeted accounts receivable balance on May 31?A) $56,000B) $64,000C) $76,000D) $132,000

Kayla Destiny · Accepted Answer

Final Answer : C, Explanation :  To calculate the budgeted accounts receivable balance on May 31, we need to first determine the total credit sales that will be made during May. From the information given, we can calculate this as $450,000 - $50,000 = $400,000. We then need to calculate the portion of the credit sales that will be collected during May, which is given as 80%. Therefore, the amount of accounts receivable expected to be collected during May is $400,000 x 0.80 = $320,000. To calculate the budgeted accounts receivable balance on May 31, we need to subtract the portion of the accounts receivable expected to be collected during May from the total accounts receivable balance on May 1, which is given as $76,000. Therefore, the budgeted accounts receivable balance on May 31 is $76,000 - $320,000 = $56,000. Therefore, the correct answer is C. May 31 accounts receivable balance:   Reference: CH08-Ref2The LaPann Corporation has obtained the following sales forecast data:   The regular pattern of collection of credit sales is 20% in the month of sale, 70% in the month following the month of sale, and the remainder in the second month following the month of sale.There are no bad debts.

What is the budgeted accounts receivable balance on May 31?

A) $56,000
B) $64,000
C) $76,000
D) $132,000

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