Reference no: EM132797289

Historically, Andy Wood products has had no significant bad debt experience with its customers. Cash sales have accounted for 10% of total sales, and payments for credit sales have been received as follows:

1. 40% of credit sales in the month of the sale
2. 30% of credit sales in the first subsequent month
3. 25% of credit sales in the second subsequent month
4. 5% of credit sales in the third subsequent month

The forecast for both cash and credit sales is as follows:

Month              Sales
January         $95,000
February          $65,000
March               $70,000
April                 $80,000
May                    $85,000

Problem 1: What is the AR balance as of May 31?

Select one:

a. $67,500
b. $70,650
c. $76,500
d. None of the above