Reference no: EM132929961

Question - The Model Company is to begin operations in April. It has budgeted April sales of $58,000, May sales of $62,000, June sales of $68,000, July sales of $70,000, and August sales of $66,000. Note that 10% of each month's sales is expected to represent cash sales; 75% of the balance is expected to be collected in the month following the sale, 17% the second month, 6% the third month, and the balance is expected to be uncollectible.

The Model Company is considering charging 1 1/2% on any balance that is not collected in the month following the month of sale. This charge would also change the collection percentages to 15% cash sales, 80% of the balance collected in the month following the sale, 16% the second month, and 3% the third month. This stricter credit policy will reduce the estimated sales budgets by 7% each month. Under this stricter credit policy, what is the amount of cash to be collected in July? Round all calculations to the nearest whole dollar.