Apollo Corporation produces and sells a single product, sewing machines, for $100 per unit. Budgeted sales for the next three months are given below:     Unit Sales June 76,000 July 80,000 August 85,000   All sales are on credit and are collected in the following pattern: 30% in the month of sales and the remaining 70% in the month following the sale.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Apollo Corporation produces and sells a single product, sewing machines, for $100 per unit. Budgeted sales for the next three months are given below:

 

 

Unit Sales

June

76,000

July

80,000

August

85,000

 

All sales are on credit and are collected in the following pattern: 30% in the month of sales and the remaining 70% in the month following the sale.

 

1. What is the amount of sales revenue reported on the company’s budgeted income statement for July?

multiple choice 1

a)$8,000,000
b)$7,600,000
c)$8,500,000
d)$7,720,000

 

 

2. Past experience has shown that end-of-month inventory levels must equal 20% of the following month’s unit sales. How many units are required to be produced in July?

multiple choice 2

a)82,400 units
b)81,000 units
c)86,400 units
d)80,000 units

3. In July, how much cash the company can collect from sales?

multiple choice 3

a)$7,600,000
b)$8,000,000
c)$8,680,000
d)$7,720,000

4. In the company’s balance sheet dated July 31, what is the balance of accounts receivable?

multiple choice 4

a)$5,600,000
b)$5,880,000
c)$5,320,000
d)$2,400,000

 

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