Accounts Receivable (AR) receives an average of 1,003 payments per week. Assume that the checks...

Question:

Accounts Receivable (AR) receives an average of 1,003 payments per week. Assume that the checks coming in are either small or large. Small checks are for an average of $477 and large checks are for an average of $5091. 20% of the checks coming in are large with the rest being small. Currently no distinction is made between the large and small checks. As a result 20% of the checks waiting to be processed are large. The total inventory in cash will be _____.

Accounts Receivables:

Accounts receivables are a term, used onto the journal entry where the companies record those transactions which had been sold into the credit and now payment is sposed to be received in the upcoming day, week or month.

Answer and Explanation:

Amount of Check Checks Quantity Total Amount of Money
Total Checks 1,003 1,405,845
Small checks 477 802 382,554
Large Checks 5,091 201 1,023,291
Since the checks waiting to be processed are all Large 1,023,291
Cash Inventory 382,554

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Accounts Receivable Journal Entries

from Financial Accounting: Homework Help Resource

Chapter 3 / Lesson 20
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