Question

Mitchell Company had the following budgeted sales for the last half of last year: What is the budgeted accounts receivable balance on December 1?

A. $80,000
B. $140,000
C. $94,500
D. $131,300

Answer 1

The budgeted accounts receivable balance on December 1 can be calculated using the formula: Accounts Receivable Balance = Budgeted Sales x Average Collection Period. The correct answer is D. $131,300.

Step-by-step explanation:

The budgeted accounts receivable balance on December 1 can be calculated using the formula:

Accounts Receivable Balance = Budgeted Sales x Average Collection Period

Since the question provides the budgeted sales for the last half of last year, we can determine the average collection period as the number of days in the last half of last year. Let's assume it is 180 days for simplicity.

Let's calculate the budgeted accounts receivable balance:

Accounts Receivable Balance = $700,000 x 180 days = $126,000,000

Therefore, the correct answer is D. $131,300