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Forecast the accounts receivable using the following annual information.

\begin{tabular}{|l|r|}
\hline
Receivable days assumption & 42 \\
\hline
Payable days assumption & 51 \\
\hline
Forecasted revenue & 72,000 \\
\hline
Forecasted cost of goods sold & 64,000 \\
\hline
Days in period & 365 \\
\hline
\end{tabular}

A. 7,364
B. 8,285
C. 6,714
D. 8,000



Answer :

GinnyAnswer
Sure, let's walk through the step-by-step process to forecast the accounts receivable using the given annual information.

1. Understand the Given Information:
- Receivable days assumption: 42 days
- Payable days assumption: 51 days (not needed for accounts receivable calculation)
- Forecasted revenue: \$72,000
- Forecasted cost of goods sold: \$64,000 (not needed for accounts receivable calculation)
- Days in period: 365 days

2. Formula to Calculate Accounts Receivable:
The formula for calculating accounts receivable is:
[tex]\[ \text{Accounts Receivable} = \left(\frac{\text{Receivable Days}}{\text{Days in Period}}\right) \times \text{Forecasted Revenue} \][/tex]

3. Substitute the Values into the Formula:
[tex]\[ \text{Accounts Receivable} = \left(\frac{42}{365}\right) \times 72,000 \][/tex]

4. Perform the Calculation:
- First, calculate the ratio of receivable days to days in the period:
[tex]\[ \frac{42}{365} \approx 0.11507 \][/tex]
- Then, multiply this ratio by the forecasted revenue:
[tex]\[ 0.11507 \times 72,000 \approx 8,284.93 \][/tex]

Thus, the accounts receivable forecast is approximately \$8,284.93. Among the given options, this matches closely with 8,285.

So, the correct answer is 8,285.

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