What would be the total cash collected during january

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Problem

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

 

Cash Sales

Credit Sales

  January

$50,000

$150,000

  February

$55,000

$170,000

  March

$39,000

$130,000

  April

$44,000

$139,000

  May

$54,000

$200,000

  June

$80,000

$290,000

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:
40% in month of sales
30% in month of following sales
30.0% in second month following sales

Assume that the accounts receivable balance on January 1 was $65,000. Of this amount, $54,000 represented uncollected December sales and $11,000 represented uncollected November sales. Given these data, what would be the total cash collected during January.

Reference no: EM131800692

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