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Mitchell Company had the following budgeted sales for the last half of last year: Cash Sales Credit Sales July $80,000 $180,000 August $85,000 $200,000 September
Mitchell Company had the following budgeted sales for the last half of last year: |
Cash Sales | Credit Sales | |
July | $80,000 | $180,000 |
August | $85,000 | $200,000 |
September | $51,000 | $160,000 |
October | $56,000 | $151,000 |
November | $66,000 | $230,000 |
December | $110,000 | $410,000 |
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: |
45% in month of sales |
50% in month of following sales |
5% in second month following sales |
Assume that the accounts receivable balance on July 1 was $76,000. Of this amount, $55,000 represented uncollected June sales and $21,000 represented uncollected May sales. Given these data, the total cash collected during July would be: |
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