Problem:
Lara Company has budgeted the following credit sales during the current year: September, $25,000; October, $36,000; November, $30,000; December, $32,000. Experience has shown that payment for credit sales is received as follows: 20% in the month of sale, 60% in the first month after sale, and 20% in the second month after sale.
Required:
What will be the balance in Accounts Receivable at the end of November assuming the payment patterns.
- A 26,600
- B 31,200
- C 33,800
- D 39,600
- E 25,200
Note: Please explain comprehensively and give step by step solution.