Question

Jeanclaude Corporation produces and sells one product. The budgeted selling price per unit is $105. Budgeted unit sales for July, August, September, and October are 7,400, 7,500, 13,800, and 15,300 units, respectively. All sales are on credit. Regarding credit sales, 40% are collected in the month of the sale and 60% in the following month. 

The budgeted accounts receivable balance at the end of August is closest to: 

A) $525,000 B) S315,000 C) $472,500 D) $787,500

Answer 1

answer: C) $472,500

The budgeted accounts receivable balance at the end of August is:

August sales 7,500 units × $105 per unit (a).........$787,500

Percent uncollected (b)...........................................60%

Accounts receivable (a) × (b)..................................$472,500