Inc. is a retailer. Its accountants are preparing the company's 2nd quarter master budget. The company hasthe following balance sheet as of March 31.Inc.Balance SheetMarch 31AssetsCash$ 83,000Accounts receivableInventory126,00069, 750220,000Plant and equipment, net of depreciationTotal assets$ 498,750Liabilities and Stockholders' EquityAccounts payableCommon stock$ 81,000348,00069, 750Retained earningsTotal liabilities and stockholders' equity$ 498,750accountants have made the following estimates:1. Sales for April, May, June, and July will be $310,000, $330,000, $320,000, and $340,000, respectively.2. All sales are on credit. Each month's credit sales are collected 35% in the month of sale and 65% in the month following thesale. All of the accounts receivable at March 31 will be collected in April.3. Each month's ending inventory must equal 30% of next month's cost of goods sold. The cost of goods sold is 75% of sales.The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the monthfollowing the purchase. All of the accounts payable at March 31 are related to previous merchandise purchases and will bepaid in April.4. Monthly selling and administrative expenses are always $58,000. Each month $6,000 of this total amount is depreciationexpense and the remaining $52,000 is spent for expenses that are paid in the month they are incurred.5. The company will not borrow money or pay or declare dividends during the 2nd quarter. The company will not issue anycommon stock or repurchase its own stock during the 2nd quarter. How much is the company's expected Accounts Receivable balance on June 30?Multiple ChoiceOO$326,500$214,500$208,000$112,000

Account receivable shows the amount of sales which is not received yet. In simple, it represents the…

Sales for April, May, June, and July will be $310,000, $330,000, $320,000, and $340,000, respectively. All sales are on credit. Each month's credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at March 31 will be collected in April.

Sales for April, May, June, and July will be $310,000, $330,000, $320,000, and $340,000, respectively. All sales are on credit. Each month's credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at March 31 will be collected in April.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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