DuPree Enterprises reported the following cash collections in July and August from credit sales:?JulyAugustFrom June receivables$33,000?From July sales105,000$45,000From August sales?168,000The company sells a single product for $20, and all sales are collected over a two-month period.Required: A. Determine the number of units that were sold in July.B. Determine the percent of credit sales collected in the month of sale and the percent of sales collected in the month following sale.C. How many units were sold in August?D. Determine the accounts receivable balance as of August 31.
What will be an ideal response?
A. July sales: $105,000 + $45,000 = $150,000; $150,000 ÷ $20 = 7,500 units
B. July sales collected in July: $105,000 ÷ $150,000 = 70%
Seventy percent of credit sales are collected in the month of sale; the remaining 30% are collected in the month following sale.
C. Seventy percent of August sales were collected in August; thus, total August sales =
$168,000 ÷ 0.70, or $240,000. August sales in units: $240,000 ÷ $20 = 12,000
D. $240,000 - $168,000 = $72,000
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