Cash Collections Related: the first half of next year: Richards Company has the

Question

Cash Collections Related: the first half of next year: Richards Company has the following budgeted sales for Cash Sales Credit Sales January..80,000 $350.000 February March April May..$55.000 $170,000 June S60,000 200,000 $50,000 $145,000 $45.000 $130,000 $50.000 $150,000 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 budjgeted accounts cscizable balancs on May a17

Explanation / Answer

Budgeted Accounts receivable on May 31 = (130000*10%)+(170000*40%)= 81000

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