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Chapter 7 on Master Budget and Cash Budgeting Exercise Orange was preparing its sales budget for the third quarter of 2 0 1 4 following

Chapter 7 on Master Budget and Cash Budgeting Exercise
Orange was preparing its sales budget for the third quarter of 2014 following the release of Premium Orange Juice. Forecast sales are as follows in millions of dollar.
October
$200 millions
November
$250 millions
December
$325 millions
Sales are 40% cash and 60% on credit. Fifty-five percent of the credit accounts are collected in the month of sale, 30% in the following month, 10% in the 3rd month, and the balance is uncollectible and written off as bad debts. Hint:
Accounts receivable at the end of September to be received in October are $39.9 million (10% of August credit sales of $140 million and 30% of September credit sales of $175 million).
Prepare a schedule showing sales forecast and cash collections for the 3rd quarter 2014.
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