Question

The next three questions are based on the following information: Copland Supplies Company is a retail store that washe merchandizes from several makers of equipment. Actual balance sheet is presented below: Balance Sheet mber 30, 2018 $25.000 Accounts Receivable (Net of allowance for uncollectible accounts) $70,000 Inventory 579,6251 Property Plant Equipment (Net of $640,000 accumulated $1.225,3751 depreciation) S1.400,000 Accounts Payable $170,000 Common Stock $1.050.0001 Retained Farines $180.000 Total Liabilities and Stockholders' Equity $1,400,000 To prepare budgets, the budget officer gathered addition budget data: • Sales are budgeted at $350,000 $260,000, and $230.000, all on credit for October, November, and December, respectively. • The company will declare $15,000 dividend in October, which will be paid in November • Collections are expected to be 55% in the month of sale. 40% in the month following the sale, and 5% uncollectible. Copland Supplies recognizes bad debt expenses in the month sales are made. • The cost of goods sold is 65% of sales. • The ending merchandise inventory should be 35% of the following month sales needs. • Payment for merchandise purchases is expected to be 60in the month of purchase with the remaining paid in the following month. • Monthly selling and administrative expenses to be paid in cash are $32,000. - Monthly depreciation is $20,000. B. 192 16 What is the accounts receivable balance of Copland as of November 30? $104,000 $192,500 $140,000 D. $143,000 E. None of the above Page 10 of 12

Answer 1

Answer : A. $104,000

Explanation:

Accounts Receivable balance of Copland as of November 30:

Budgeted sales in November	$260,000
Less : Cash sales ($260,000 * 55%)	($143,000)
Less : Uncollectibles ($260,000 * 5%)	($13,000)
Accounts Receivable balance of Copland as of November 30	$104,000