May 1 is the same as April 30. On April 30, the company will have outstanding (unpaid) receivables from its March sales and its April sales only. All sales made during January and February will have been collected by April 30. The amount outstanding on April 30 from March sales will be 15% of March sales, because 60% of March sales will have been collected during March and 25% of March sales will have been collected during April, for a total of 85% collected. 100% ? 85% collected leaves 15% yet to be collected as of April 30. The amount outstanding on April 30 from April sales will be 40% of April sales, because 60% of April sales will have been collected during April. 100% ? 60% leaves 40% yet to be collected as of April 30. Receivable balance as of April 30 from March sales: 15% of $280,000 sales = $42,000. Receivable balance as of April 30 from April sales: 40% of $260,000 sales = $104,000. The total receivable balance as of April 30 (May 1) is $42,000 + $104,000, which equals $146,000.
This is the portion of April sales that was still outstanding in receivables at the end of April, increased by 2% of the amount of April sales that were collected during April. This answer is incorrect for two reasons. One, it fails to take into account the portion of March sales that were also still outstanding at the end of April. 15% of sales made in March had not been collected as of the end of April. Two, it fails to recognize that when payments were received in April for sales made in April and the customers took the 2% discount, the dollar amount of the discounts taken did not remain in accounts receivable as outstanding receivables. As the discounts are honored, the unpaid 2% is debited to an expense account and credited to accounts receivable, so it is removed from outstanding accounts receivable.
This is 15% of March sales plus 98% of 40% of April sales. The April sales amount still outstanding in receivables at the end of April should not be decreased by the 2% discount.
This answer fails to take into account collections of 15% of February sales and 25% of March sales that are received during April.
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