Information

 
Question

CPA-08746

 

Answer
There is a quick way to do this one, and a longer way, that's sort of unnecessary. First, since the company collects 75% in the month of sale and 25% in the next month, and since we are just asked for the AR on 3/31, then the ONLY thing we are concerned about are the March sales that have not been collected, which is 25% of the $50,000, and so $12,500. Everything else would have been collected by now from January, February, and March.

The $25,000 from 1/1 would have been collected in January, the $20,000 would have been collected $15,000 in January and $5,000 in February, the $30,000 would have been collected $22,500 in February and $7,500 in March, and the $50,000 would have been collected $37,500 in March, but all we need to know is the remaining $12,500 that will be collected during April.
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