Question

Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget. Data for the July master budget are given below: The June 30th balance sheet follows: Cash $ 25,000Accounts payable $ 45,000 Accounts receivable 110,000Capital stock 300,000 Inventory 54,000Retained earnings 94,000 Building and equipment (net) 250,000 Actual sales for June and budgeted sales for July, August, and September are given below: June $137,500 July 360,000 August 400,000 September 320,000 Sales are 20 percent for cash and 80 percent on credit. All credit sales are collected in the month following the sale. There are no bad debts. The gross margin percentage is 40 percent of sales. The desired ending inventory is equal to 25 percent of the following month's sales. One fourth of the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month. The monthly cash operating expenses are $43,000, and the monthly depreciation expenses are $7,000. What is the balance of the accounts receivable at the end of July?

Answer 1

Answer-The balance of the accounts receivable at the end of July= $288,000

As 80 % sales is on credit so ,80% of $360,000= $288,000 which will be collected in the month following the sale.

Hence, The correct option is b-$288,000

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