Mitchell company had the following budgeted sales for the last quarter of the ye

Question

Mitchell company had the following budgeted sales for the last quarter of the year:
October $145,000
November $200,000
December $350,000
the company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:
Collections on credit sales:
60% in month of sale
30% in month following sale
10% in second month following sale.
What is the budgeted accounts receivable balance on December 31st?
A. $80,000 B. $140,000 C. $94,500 D. $160,000

Explanation / Answer

C. $94,500

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