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Ratchet Manufacturing anticipates total sales for August, September, and October of $220,000, $230,000, and $240,500 respectively....

Ratchet Manufacturing anticipates total sales for August, September, and October of $220,000, $230,000, and $240,500 respectively. Cash sales are normally 30% of total sales and the remaining sales are on credit. All credit sales are collected in the first month after the sale. Compute the amount of accounts receivable to be reported on the company's budgeted balance sheet for August.

Multiple Choice

$154,000.

$66,000.

$161,000.

$69,000.

$220,000.

business   accounting   
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Answer #1

Answer: $154,000

Workings:

Total sales for the month of August = $220,000

Therefore Accounts receivable = $220,000 * 70% = $154,000

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