As of January 1 of the current year, the Gunner Company had accounts receivables of $50,000. The sales for January, February, and March were as follows: $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. What is the accounts receivable balance as of March 31?

a. $60,000

b. $48,000

c. $72,000

d. $58,720

Question

Kendall Yates

Business

22 April, 11:25

As of January 1 of the current year, the Gunner Company had accounts receivables of $50,000. The sales for January, February, and March were as follows: $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. What is the accounts receivable balance as of March 31?

a. $60,000

b. $48,000

c. $72,000

d. $58,720

+3

Answers (1)

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Larry · Answer 1

b. $48,000

Explanation:

According to the given situation the computation of accounts receivable balance is shown below:-

Jan Feb Mar April

Sales $120,000 $140,000 $150,000

Cash Sales

at 20% $24,000 $28,000 $30,000

Credit Sales

at 80% $96,000 $112,000 $120,000

Collection in same

month at 60% $57,600 $67,200 $72,000

Collection in next

month at 40% $50,000 $38,400 $44,800 $48,000

Therefore the accounts receivable balance as of March 31 is $48,000