Cungs Dress Delivery operates a mail-order business that sells clothes designed for frequent travelers. It had sales

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Cung’s Dress Delivery operates a mail-order business that sells clothes designed for frequent travelers. It had sales of $610,000 in December. Because Cung’s Dress Delivery is in the mail order business, all sales are made on account. The company expects a 30 percent drop in sales for January. The balance in the Accounts Receivable account on December 31 was $96,400 and is budgeted to be $73,600 as of January 31. Cung’s Dress Delivery normally collects accounts receivable in the month following the month of sale.
Required
a. Determine the amount of cash Cung’s Dress Delivery expects to collect from accounts receivable during January.
b. Is it reasonable to assume that sales will decline in January for this type of business? Why or why not?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Related Book For  answer-question

Survey of Accounting

ISBN: 978-0073379555

2nd edition

Authors: Edmonds, old, Mcnair, Tsay

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