Use the Following Information for Questions
Livanos, Inc Customer Amounts on Account Are Collected 70% in the Month

question 143

Multiple Choice

Use the following information for questions
Livanos, Inc.reports all its sales on credit, and pays operating costs in the month incurred.Amounts for 2016 are: $$\begin{array} { l c c c c c } & \text { March } & \text { April } & \text { May } & \text { June } & \text { July } \\\text { Budgeted sales } & \$ 300,000 & \$ 290,000 & \$ 320,000 & \$ 280,000 & \$ 210,000 \\\text { Budgeted purchases } & \$ 144,000 & \$ 120,000 & \$ 128,000 & \$ 132,000 & \$ 90,000\end{array}$$ Customer amounts on account are collected 70% in the month of sale and 30% in the following month.
-Cost of goods sold is 60% of sales.
-Livanos purchases and pays for merchandise 40% in the month of acquisition and 60% in the following month.
-Operating expenses are: Salaries, $50,000; Depreciation, $12,000; Rent, $15,000; and Utilities, $14,000.
-Accounts payable is used only for inventory acquisitions.
-How much is Livanos' May 31, 2016 budgeted Accounts Receivable?

• A)$320,000
• B)$96,000
• C)$224,000
• D)$311,000

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Definitions:

Gross Domestic Product

The total market value of all final goods and services produced within a country in a specific time period.

Aggregate Expenditure

This is the total spending on final goods and services in an economy, including consumption, investment, government purchases, and net exports.

Disposable Income

The budget households have for expenses and savings after income tax deductions.

Planned Spending

Planned or budgeted expenditures by individuals, companies, or governments anticipated over a certain period.