Given the following information for Lily Corporation, what is the amount of Acco

Question

Given the following information for Lily Corporation, what is the amount of Accounts Receivable as of March 31, 2018? November December January February March Sales $400,000 $450,000 $470,000 $460,000 $440,000 Cash collected in month of sale 20% Credit collections: Collected in month of sale 5% Collected in month following the sale 85% Collected in second month following the sale 10% Hint: The amount of accounts receivable at March 31, 2018 is the amount of sales that have not yet been collected as of March 31,2018. You must include all calculations.

Explanation / Answer

Accounts receivable in March = March sales *80% * (100% -5%) + February sales *80% * (100% -5% -85%)

= 460000 *80% * 95% + 440000 * 80% * 10%

= 384800

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