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Calculation of cash collection and ending accounts receivables
Budgeted sales for the second quarter of the year for Reuben Company are as follows:
Budgeted SalesApril $400,000May 200,000June 600,000
The company normally collects 60 percent in the month of sale, 30 percent in the month following the sale and ten percent in the second month following the month of the sale.
Actual sales in February and March were $600,000 and $500,000 respectively.
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