(44-45) Norris Inc. had the following budgeted sales for the last half of last y

Question

(44-45) Norris Inc. had the following budgeted sales for the last half of last year:

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

44.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:

45.What is the budgeted accounts receivable balance on December 1?

Explanation / Answer

1. $ 195,000 2. $ 383,000

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