Solution-Compute the accounts receivable as of that date

Compute the accounts receivable as of that date

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Reference no: EM132944647

Peak sales for Mideast Products, Inc., occur in August. The company's sales budget for the third quarter showing these peak sales is given below:

July August September Total

Budgeted sales ................ P600,000 P900,000 P2,000,000 P2,000.000

From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, that another 70% is collected in the month following sale, and that the remaining 10% is collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled P430,000 and June sales totaled P540,000.

Required:

Problem 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter.

Problem 2. Assume that the company will prepare a budgeted statement of financial position as of September 30. Compute the accounts receivable as of that date.

Reference no: EM132944647

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Compute the accounts receivable as of that date

Reference no: EM132944647

Reference no: EM132944647

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