Hawaii Inc

Accounting Aug 11, 2020

Hawaii Inc., has projected sales to be 260,000 in June, 270,000 in July and 300,000 in august .Hawaii collects 30% of a month's sales in the month of sale, 50% in the month following the sale, and 20% in the second month following the sale. What is the accounts receivable balance on august 31?

Expert Solution

Computation of the accounts receivable balance on August 31:-

Accounts receivable balance = (July sales * 20%) + (August sales * (1-30%))

= (270,000*20%) + (300,000*70%)

= 54,000 + 210,000

= 264,000

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