Determine what accounts receivable balance at end of july

Assignment Help Accounting Basics

Reference no: EM132726740

Morganton Company makes one product and it provided the following information to help prepare the master budget only for July:

a. The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 10,000, 12,000 14,000, and 13,000 units, respectively. All sales are on credit.

b. Forty percent of credit sales are collected in the month of the sale and 60% in the following month.

c. The ending finished goods inventory equals 20% of the following month's unit sales.

d. The ending raw materials inventory equals 10% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.00 per pound.

e. Twenty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month.

f. The direct labor wage rate is $15 per hour. Each unit of finished goods requires two direct labor-hours.

g. The variable selling and administrative expense per unit sold is $1.80. The fixed selling and administrative expense per month is $62,000.

Question 1. What is the budgeted sales revenue for July?

Unit sales (a)......................................................

Selling price per unit (b) ....................................

Total sales (a) × (b) ............................................

Question 2. What are the expected cash collections for July?

June sales:?..........................................

July sales:..........................................

Total cash collections......................................

Question 3. What is the accounts receivable balance at the end of July?

July sales (a) ......................................................

Percent uncollected (b) ......................................

Accounts receivable (a) × (b) ............................

Reference no: EM132726740

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