Corbin Company Has Prepared the Following Sales Budget Collections of Credit Sales Are 50% in the Month of Month

question 108

Multiple Choice

Corbin Company has prepared the following sales budget:
$\begin{array}{lll}\text { Month }&\text { Cash Sales }&\text { Credit Sales }\\\text { September } & \$ 99,000 & \$ 250,000 \\\text { October } & 225,000 & 180,000 \\\text { November } & 310,000 & 210,000 \\\text { December } & 94,000 & 170,000\end{array}$
Collections of credit sales are 50% in the month of sale,40% in the month following sale,and 10% two months following sale.No uncollectible accounts are expected.What is the expected balance in Accounts Receivable at November 30?

• A) $77,500
• B) $105,000
• C) $123,000
• D) $210,000

Recognize the terms and implications of credit sales terms like 2/10, n/30.

Identify the components of the operating cycle for a merchandiser.

Understand the impact of new revenue recognition rules on financial statements.

Understand the principles and applications of nonlinear optimization models.

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Definitions:

Consumer

An individual or group who purchases goods or services for personal use and not for manufacture or resale.

Good 2

Refers to a second good or item considered in a theoretical economic model, usually in the context of comparative analyses.

Fixed Ratio

A quantitative relationship between two or more variables where one variable is a fixed multiple of the others, often used to describe proportional relationships in finance and engineering.

Excess Goods

Products that exceed the demand in the market, often leading to surplus and potential waste.