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Mitchell Company had the following budgeted sales for the last half of last year: Cash Sales Credit Sales July $50,000 $150,000 August $55,000 $170,000 September
Mitchell Company had the following budgeted sales for the last half of last year: |
Cash Sales | Credit Sales | |
July | $50,000 | $150,000 |
August | $55,000 | $170,000 |
September | $34,000 | $130,000 |
October | $39,000 | $134,000 |
November | $49,000 | $200,000 |
December | $80,000 | $240,000 |
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 |
35% in month of following sales |
20% in second month following sales |
What is the budgeted accounts receivable balance on December 1? |
A) $131,300
B) $136,800
C) $124,000
D) $110,000
Please prove your answer
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