Preparing a cash receipts budget Laura Falk, Bates & Hill Fabricators accounts receivable manager, has just received the companys sales budget for the first quarter (see Exercise 5.8). The company makes all sales on credit. Laura recently reviewed the companys collection history and found that 72% of the sales are collected in the month of the sale, 26% of sales are collected in the month following the sale, and 2% of sales are uncollectible. The company expects to have a net accounts receivable balance of $98,200 on January 1, and this amount represents the remaining receivables from Decembers sales.

Required

Prepare Bates & Hills cash receipts budget for the first quarter.

Exercise 5.8, Sales Budget Budgeted units sold Budgeted sale price Budgeted revenue January February 25,000 28,000 21 $ 21 $ 525.000 $ 588.000 $ March 32,000 21 $ 672.000 $ Quarter 85,000 21 1.785.000 $ $