Elsa and Anna operate a business that manufactures frozen foods. They are preparing a cash budget for the second quarter of 2020. Because of COVID-19 they expect 90% of March sales will be collected in June and customers have been informed that they do not need to pay until then. The other 10% of March sales will be collected in March. After March, they anticipate that collections will return to normal, where 40% of sales are collected in the month of sale, 50% is collected in the month after sale, and 10% is collected two months after sale.

1) Calculate the total cash receipts for June, using the following information. (4 marks)

Sales:

March $90,000

April $80,000

May $70,000

June $65,000

2) Calculate the accounts receivable balance at June 30. (2 marks)