Mike\'s Bike Shop - Pro forma accounts receivable balance calculations - 4 Apr,
ID: 2626105 • Letter: M
Question
Mike's Bike Shop - Pro forma accounts receivable balance calculations - 4 Apr, 2013 14-2 (Pro forma accounts receivable balance calculations) On March 31, 2007, Mike's Bike Shop had outstanding accounts receivable of $17,500. Mike's sales are roughly evenly split between credit and cash sales, with the credit sales collected half in the month after the sale and the remainder 2 months after the sale. Historical and projected sales for the bike shop are given: Month Sales Month Sales January $15,000 March $25,000 February 20,000 April (projected) 30,000 a. Under these circumstances, what should the balance in accounts receivable be at the end of April? b. How much cash did Mike's real
Explanation / Answer
Calculation Of Debtor Sales January Feb march Apr Total Sales 15000 20000 25000 30000 Cash Sale 7500 10000 12500 15000 Creditr sale 7500 10000 12500 15000 Realised In Total Feb 3750 3750 March 3750 5000 8750 April 5000 6250 11250 Total Cash Raelised Jan 7500 Feb 13750 March 21250 April 26250 Total cash Realised 68750 Closing balance Of Debtors Balance of March 6250 Balance of april 30000 Bal;ance as on 30.04.2013 36250