Question

Carter Lumber sells lumber and general building supplies to building contracttors in a medium-sized town in Montana Deta regarding the store's operations follow o Sales are budgeted at $438,000 for November, $448,000 for December, and $458,000 for January o Collections are expected to be 70% in the month of sale. 27 % in the month following the sale, and 3 % uncollectible. o The cost of goods sold is 70 % of sales o The company desires to have an ending menchandise inventory equal to B0% of the following month's cost of goods sold. Payment for merchendise is made in the month following the purchase o Other monthly expenses to be paid in cash are $31,500 o Monthly depreciation is $22.800 o ignore taxes Balance Sheet October 31 Assets Cash s15700 Accounts recelvable, net of alowance for uncollectible eccounts 88.200 Inventory Property plant and equipment, net of $519.000 accumulated depreciation 203.000 t038000 Total assets $1344 900 Liabines and 5tockholders Equity Accounts payabie Common stock s 335,000 780,000 Retained eamings Total labilties and stockhoideny' equity 229.900 s344900 The accounts recelvable belance, net of uncolectible accounts, at the end of December would be O $120,960 O $132,660 O $223.560 O $104.360

Answer 1

Account receivable for December = 27% of December Sales

= 448000*27%

Account receivable for December = 120960

So answer is a) $120960