Richards Corporation had the following budgeted sales for the first half of next

Question

Richards Corporation had the following budgeted sales for the first half of next year: Cash $70,000$170,000 $75,000$190,000 $150,000 $137000 $52.000$220,000 $270,000 Febru March $37000 $42.000 Ma June $100,000 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 50% in month of sales 35% in month of following sales 15% in second month f sales The accounts receivable balance on January 1 is $67,000. Of this amount, $52,000 represents uncollected December sales and $15,000 represents uncollected November sales What is the budgeted accounts receivable balance on May 30? O $130,550 O $52,000 O $110,000 $182.550

Explanation / Answer

Option A is correct ($130550)

Working

At the end of May 15% of april credit sales and 50 % of May credit will remain outstanding.

= 137000*15% + 220000 (35+15)%

= $ 130550

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