Carmen’s Dress Delivery operates a mail-order business that sells clothes design
ID: 2538924 • Letter: C
Question
Carmen’s Dress Delivery operates a mail-order business that sells clothes designed for frequent travelers. It had sales of $660,000 in December. Because Carmen’s Dress Delivery is in the mail-order business, all sales are made on account. The company expects a 27 percent drop in sales for January. The balance in the Accounts Receivable account on December 31 was $96,500 and is budgeted to be $73,200 as of January 31.
Required
Determine the amount of cash Carmen’s Dress Delivery expects to collect from accounts receivable during January.
Carmen’s Dress Delivery operates a mail-order business that sells clothes designed for frequent travelers. It had sales of $660,000 in December. Because Carmen’s Dress Delivery is in the mail-order business, all sales are made on account. The company expects a 27 percent drop in sales for January. The balance in the Accounts Receivable account on December 31 was $96,500 and is budgeted to be $73,200 as of January 31.
Required
Determine the amount of cash Carmen’s Dress Delivery expects to collect from accounts receivable during January.
Expected cash collectionExplanation / Answer
Credit sales for January =660000*(100-27%) 481800 T- Account Account receivable opening balance 96,500 505,100 cash collection Credit sale 481800 Ending balance 73,200 Expected cash collection 505,100 answer