Question
Magicians Corporation has the following budgeted sales for the next six months: Cash Credit Sales Sales June $ 100,000 $ 200,000 July $ 125,000 $
Magicians Corporation has the following budgeted sales for the next six months:
Cash | Credit | |
Sales | Sales | |
June | $ 100,000 | $ 200,000 |
July | $ 125,000 | $ 175,000 |
August | $ 95,000 | $ 160,000 |
September | $ 115,000 | $ 170,000 |
October | $ 110,000 | $ 155,000 |
November | $ 90,000 | $ 140,000 |
The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:
Collections on credit sales: | |
In month of sale | 10% |
In month following sale | 85% |
In second month following sale | 5% |
The accounts receivable balance on June 1 is $150,000. Of this amount, $30,000 represents uncollected May sales and $5,000 represents uncollected April sales. The total cash collected during June would be: _______________
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