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Carmen’s Dress Delivery operates a mail-order business that sells clothes designed for frequent travelers. It had sales of $400,000 in December. Because Carmen’s Dress Delivery is in the mail-order business, all sales are made on account. The company expects a 30 percent drop in sales for January. The balance in the Accounts Receivable account on December 31 was $60,000 and is budgeted to be $41,000 as of January 31. Required Determine the amount of cash Carmen’s Dress Delivery expects to collect from accounts receivable during January.

Answer :

Answer:

The amount of cash Carmen’s Dress Delivery expects to collect from accounts receivable during January is $299,000

Explanation:

The computation of the cash collection is shown below:

= Sales × remaining percentage + opening balance of accounts receivable - ending balance of accounts receivable

= $400,000 × 0.70 + $60,000 - $41,000

= $280,000 + $60,000 - $41,000

= $299,000

The remaining percentage equal to

= Percentage - drop percentage

= 100% - 30%

= 70%

chilljain33

Accounts receivables are such part of sales on which the money has not been received yet by the business. Expected accounts receivables collection for Carmen in January will be $299,000.

What are account receivables?

Accounts receivables are those bills of a business where the sales has been completed, but the payment for the same has not been made yet and is intimated to the business for accounting purposes.

From the information aforementioned, the expected cash from account receivables to be collected will be,

[tex]\rm Expected\ Cash\ Collection= Revised\ Sales\ after\ Drop\ + Starting\ Balance- Ending\ Balance\\ \\\rm Expected\ Cash\ Collection= \$280,000 + \$60,000 - \$41,000\\\\\rm Expected\ Cash\ Collection= \$299,000[/tex]

Hence, the amount of cash expected to be collected from account receivables for Carmen's Dress Delivery will be $299,000 for the month of January.

Learn more about account receivables here:
https://brainly.com/question/7496382

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