Frist understand question this is very easy just read question carefully and follow collection pattern is 60% in the month of sales means first month of sales. And 25% in the month after sales means 2nd Second Month after sales and 15% second month after sales, means 3rd Month after sales. Clear right
They are confusing after given 2% discount in the month of sales but you need to understand clearly they are giving 2% discount to those customers who paid 100% full amount in the month of sales but there no customers who paid full amount because collection pattern is less than 100% in the month of sales they are paying 60% in the sales month and 25% sales in second month and 15% after second month means 3rd month. So there is no need to take discount to any sales amount.
Let's understand how we are getting collection after sales following:
January sales amount : $220,000
February sales amount : $ 200,000
March sales amount : $280,000
April sales amount : $260,000
So, now we need to understand how much collection we collected from sales figures as per collection pattern which is given above in the question
1) First January sales $220,000
In the First Month means Jan month of sales $220,000 we collected 60% means $132,000
In the 2nd Month Feb we collected Remaining 25% of $220,000 means $55,000
In the 3rd Month March we collected Remaining 15% of $220,000 means $33000
60% + 25%+15% = 100% we got in March month there is no pending collection for the month of Jan Right!
2)Now February sales $200,000
In the First Month means Feb month of sales $200,000 we collected 60% as per collection pattern $120,000
In the 2nd Month Means March we collected remaining 25% of $200,000 as per collection pattern $50,000
In the 3rd Month means April we collected remaining pending amount $30,000
We collected 100% in Feb month also.
3) Now Let's go to March sales amount $280,000
In the First month means March month of sales $280,000 we collected 60% as per collection pattern $168,000
In the Second month means April we collected remaining 25% of 280,000 means $70,000
In the 3rd Month Means May remaining 15% of 280,000 Still not yet collected or account receivable balance $42,000 in the may month.
We collected in this month only 85% $168,000+$70,000 = 238,000 so remaining pending amount is $42000
So the uncollected balance will be collect in the month of May is $42000.
4) Last one April sales amount $260,000
In the first month of sales means April we collected 60% of $260,000 as per collection pattern $156,000
But in the second month means May we did not received any amount so whatever balance is pending we called accounts receivable the balance which will be collected in the future period of time
$260,000-156000 = $104,000 is Pending accounts receivable balance for May 25% and June 15 %
So the answer is here ( Add Pending balance to get accounts receivable for the month of May)
Pending balance in the month of March $42000 and Last month April pending balance is 104,000
$42000+104000 = 146,000 (D).
Thanks, I hope u understand this
I am waiting for your feed back.
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