As of January 1 of the Current Year, the Grackle $$60,000

question 112

Multiple Choice

As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000. The sales for January, February, and March of 2012 were as follows: $120,000, $140,000 and $150,000. 20% of each month's sales are for cash. Of the remaining 80% (the credit sales) , 60% are collected in the month of sale, with remaining 40% collected in the following month. What is the accounts receivable balance as of March 31?

• A) $72,000
• B) $48,000
• C) $58,720
• D) $$60,000

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Definitions:

Closing Entries

Made at the end of the accounting period to transfer balances in temporary (income statement) accounts to Retained Earnings and to establish a zero balance in each of the temporary accounts for beginning the next accounting period.

Account Balances

The total amount of money in an account at a certain point in time, which can represent assets or liabilities depending on the account type.

Temporary Accounts

Accounts that are cleared out at the end of each accounting period, including revenues, expenses, and dividends accounts.

Permanent Accounts

Balance sheet accounts that carry their ending balances into the next accounting period, including assets, liabilities, and equity accounts.