Mitchell Company had the following budgeted sales for the first half of next yea

Question

Mitchell Company had the following budgeted sales for the first half of next year: 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: Assume that the accounts receivable balance on January 1 was $76,000. Of this amount. $55,000 represented uncollected December sales and $21,000 represented uncollected November sales. Given these data, the total cash collected during January would be: $232,000 $262,000 $100,000 $306,000

Explanation / Answer

Calculation of the cash collected in January January Cash Sales 80000 Credit sales of Jan 180000*45% 81000 November Cash Received 21000 December 55000*50%/55% 50000 Total cash Received 232000 The correct option is A. $ 232000

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