Question

abc, incorporated, has a beginning receivables balance on january 1st of $590. sales for january through april are $350, $380, $460 and $480, respectively. the accounts receivable period is 60 days. how much did the firm collect in the month of march? assume 365 days per year. multiple choice

Answer 1

The firm collected $1,320 in the month of March.

Step-by-step explanation:

To determine the amount the firm collected in the month of March, we need to calculate the receivables balance at the end of March. The accounts receivable period is 60 days, so the receivables balance at the end of March would include sales from January and February.

Adding up the sales for January through February, we get $350 + $380 = $730.

Since the beginning receivables balance on January 1st was $590, the receivables balance at the end of March would be $590 + $730 = $1,320. Therefore, the firm collected $1,320 in the month of March.

Answer 2

ABC, Incorporated collected $1,021.52 in the month of March.

Daily Sales Average = (Total Sales for January through April) / Number of Days in January through April

= ($350 + $380 + $460 + $480) / 120 days

= $1670 / 120 days

= $13.92 per day

The accounts receivable at the end of March is:

= Beginning Receivables on January 1st + (Daily Sales Average * Accounts Receivable Period in Days for March)

= $590 + ($13.92 * 31 days)

= $1,021.52 .