I. Budgeted Sales / Cash Collections

ABC Poultry Co. makes a smoked turkey that is very popular on Thanksgiving Day. Thus, peak sales occur in November of each year, as shown on the companys sales budget for the fourth quarter given below:

Oct. Nov. Dec. Total

Budgeted Sales (all on account ) $150,000 $250,000 $100,000 $500,000

From past experiences, the company has learned that 30% of a months sales are collected in the month of sale, and 50% are collected in the month following the sale, and the remaining 20% are collected in the second month following the sale. Bad debts are negligible and can be ignored. August sales totaled $110,000, and September sales totaled $130,000.

Required:

1. Prepare a schedule of expected cash collections from sales by month and in total for the fourth quarter

2. What is the accounts receivable balance on Dec. 31?