Purchase Solution

ABC Company's Ending Accounts Receivable Balance

Not what you're looking for?

Ask Custom Question

ABC sold $5 million worth of its product, wood blocks, during 2006. It sold all of its product on open credit accounts to its customers. For 2006, ABC collected 80% of its sales prior to year end. ABC uses the net method of recognizing Sales and Accounts Receivable, and provides terms to its best customers of 5/5, net 45. Of the total sales during the year, 60% were to its best customers with the remaining 40% to customers whose standard terms were full payment due within 30 days. Presuming that the collection rate between best customers and other customers is the same, calculate the ending Accounts Receivable balance as of December 31, 2006.

Purchase this Solution

Solution Summary

In this solution, the author computes ABC's ending accounts receivable balance.

Solution Preview

Standard terms is the payment within 30 days and the collection rate ...

Purchase this Solution


Free BrainMass Quizzes
Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Introduction to Finance

This quiz test introductory finance topics.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.