What is the budgeted accounts receivable balance

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Reference no: EM132008842

Mitchell Company had the following budgeted sales for the last half of last year:

July Cash sales = $50,000; Credit sales = $150,000

August Cash sales = 55,000; Credit sales = 170,000

September Cash sales = 45,000; Credit sales = 130,000

October Cash sales = 50,000; Credit sales = 145,000

November Cash sales = 60,000; Credit sales = 200,000

December Cash sales = 80,000; Credit sales = 350,000

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

1. Assume that the accounts receivable balance on July 1 was $75,000. Of this amount, $60,000 represented uncollected June sales and $15,000 represented uncollected May sales. Given these data, the total cash collected during July would be:

2. What is the budgeted accounts receivable balance on December 1.

Reference no: EM132008842

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