Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Mitchell Company had the following budgeted sales for the first half of next year: Cash Sales Credit Sales January $50,000 $150,000 February $55,000 $170,000 March

Mitchell Company had the following budgeted sales for the first half of next year:

Cash Sales Credit Sales
January $50,000 $150,000
February $55,000 $170,000
March $39,000 $130,000
April $44,000 $139,000
May $54,000 $200,000
June $80,000 $290,000

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:
40% in month of sales
30% in month of following sales
30.0% in second month following sales

Assume that the accounts receivable balance on January 1 was $65,000. Of this amount, $54,000 represented uncollected December sales and $11,000 represented uncollected November sales. Given these data, the total cash collected during January would be:

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Financial Accounting

Authors: Fred Phillips, Robert Libby, Patricia A Libby

3rd Edition

0073527106, 9780073527109

More Books

Students also viewed these Accounting questions

Question

What is your greatest strength?

Answered: 1 week ago