Use the Following Information for the Next 2 Questions

question 127

Multiple Choice

Use the following information for the next 2 questions.
Taft Corporation collects cash from customers as follows: 60% in the month of sale, 20% in the month after sale, 19% in the second month after sale, and 1% is never collected. Bad debts are written off annually in December. Budgeted sales are all on credit and amount to:
-What is the budgeted amount of accounts receivable at the end of August?

• A) $353,000
• B) $340,000
• C) $329,000
• D) $377,000

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Definitions:

Sales Tax

A tax imposed by a government on the sale of goods and services.

List Price

The manufacturer's suggested retail price of a product before any discounts or allowances.

Purchases Discount

A reduction in the amount payable by a buyer to a seller, if the payment on the purchase is made within a specified period.

Chart Of Accounts

A list of the accounts in the ledger.