The Fraley Corporation, a merchandising firm, has planned the following sales for the next three months:

April May June

Total budgeted sales $$70,000$ $$90,000$ $$60,000$

Sales are made on account. From experience, the company has learned that a month's sales on account are collected according to the following pattern:

Collected in the month of sales........................................................ $70\%$

Collected in the first month following the month of sale $.........20\%$

Collected in the second month following the month of sale..... $8\%$

Assume that the account receivable balance on April $1$ is $$21,000.$ Of this amount, $$15,000$ represents uncollected March sales and $$6,000$ represents uncollected February sales.

Required $($show supporting calculations to receive credit$)$:

$(15$ points$)$ Compute the budgeted cash receipts for April, May, and June.

$(5$ points$)$ Determine the balance of accounts receivable on June $30.$

Answer rating: 100% (QA)

Lets break down the calculation step by step 1 Compute Budgeted Cash Receipts for April May an... View the full answer