Show short work! Mitchell Company had the following budgeted sales for the last

Question

Show short work! Mitchell Company had the following budgeted sales for the last half of last year: Cash Sales Credit Sales July $50,000 $150,000 August September..$45,000 130,000 . $55,00 $170,000 October. November$60,000 December.$80,000 $350,000 $50,000 $145,000 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 26. What is the budgeted accounts receivable balance on December 1? A. $80,000 B. $140,000 C. $94,500 D. $131,300

Explanation / Answer

26) Receivables balance on December 1: 40% of November sale = 200000*40% = 80000 10% of October sale = 145000*10% = 14500 Budgeted accounts receivable balance on December 1 94500 Answer: Option [C] 27) Total cash collected during July: 60% of July sales = 150000*60% = 90000 June sales = (60000/40%)*30% = 45000 May sales = the balance is the 10% to be collected in the third month, ie: in July 15000 Total cash collected during July 150000 Answer: Option [A]

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