Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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: |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started