ABC Inc has a beginning receivables balance on January 1st o

ABC, Inc. has a beginning receivables balance on January 1st of $600. Sales for January through April are $360, $390, $470 and $490, respectively. The accounts receivable period is 60 days. How much did the firm collect in the month of March? Assume that a year has 360 days.

$490

$470

$600

$390

$360

Solution

Accounts receivables period is 60 days. That means goods sold today will be collected in months.

Therefore amount collected in the month of March is what sold in January. Goods sold in January worth 360. Therefore, total amount collected in March would be $360.