tC ezto.mheducation.com/hm.tpx Richards Corporation has the following budgeted s

Question

tC ezto.mheducation.com/hm.tpx Richards Corporation has the following budgeted sales for the first half of next year January February March April May June Cash Sales $80,000 $85,000 $36,000 $41,000 $51,000 $110,000 Credit Sales $180,000 $200,000 $160,000 $136,000 $230,000 $260,000 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 55% in month of Sales 30% in month of following sales 15% in second month following sales December sales end 512 The accounts receivable balance on January 1 is $66,000 Of this amount, $54,000 represents uncollected December sales and $12,000 represents uncollected November sales What is the budgeted accounts receivable balance on May 302 $103,500 O $177900 O $123,900 O $54.000 PM O Type here to search

Explanation / Answer

Correct answer is $1,23,900 Calculation of Budgeted accounts receivables balance on May 30:- Uncollected April = $ 1,36,000 X 15% = $      20,400 Uncollected May = $ 2,30,000 X 45% = $ 1,03,500 $ 1,23,900

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