Peak sales for Northern Lift, a wholesale distributor of snow shovels, occur in November. The companys sales

Question:

Peak sales for Northern Lift, a wholesale distributor of snow shovels, occur in November. The company€™s sales budget for the fourth quarter showing these peak sales is given below:

December Total October November Budgeted sales (all on account).. $400,000 $800,000 $1.900,000 ... $700,000 .

From past experience, the company has learned that 25% of a month€™s sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 5% are collected in the second month following sale. Bad debts are negligible and can be ignored. August sales totalled $70,000, and September sales totalled $180,000.
Required:
1. Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter.
2 Assume that the company will prepare a budgeted balance sheet as of September 30. Compute the accounts receivable as of that date.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...