Answer the Following Questions Using the Information Below:
Finmin Company

question 106

Multiple Choice

Answer the following questions using the information below:
Finmin Company has the following sales budget for the last six months of 2015:
$\begin{array}{lrlr}\text { July } & \$ 200,000 & \text { October } & \$ 180,000 \\\text { August } & 160,000 & \text { November } & 200,000 \\\text { September } & 200,000 & \text { December } & 180,000\end{array}$ Sales are immediately due, however the cash collection of sales, historically, has been as follows:
65% of sales collected in the month of sale,
25% of sales collected in the month following the sale,
8% of sales collected in the second month following the sale, and
2% of sales are uncollectible.
-What is the ending balance of accounts receivable for the end of September,assuming uncollectible balances are written off at the end of the second month following the sale?

• A) $199,000
• B) $97,000
• C) $89,800
• D) $86,000

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Definitions:

Note Receivable

A financial asset representing a written promise for a debtor to pay a specified sum of money to the creditor on a demand or at a future date.

Financing Activities

Activities that result in changes in the size and composition of the equity capital or borrowings of the entity, reflected in its cash flows.

Principal Collection

refers to the portion of payments received that goes towards reducing the outstanding principal balance of a loan.

Equipment Purchase

Equipment purchase refers to the acquisition of physical assets, such as machinery or tools, necessary for a company to operate and produce goods or provide services.