Problem 1. Capes Corporation has budgeted sale of its popular scooter as follows:

Month	Units	Unit Price	Budgeted sales
June	20,000	$10	$200,000
July	40,000	$10	$400,000
August	50,000	$10	$500,000
September	30,000	$10	$300,000
October	60,000	$10	$600,000

From past experience, the company has learned that 40% of a months sale are collected in the month of sale, another 60% are collected in the month following the sale.

1. Prepare a schedule of expected cash collections from sales for the third quarter (July, August, September). (10 pts)

2. What is the accounts receivable balance as of the end of September? (5pts)

The company is now in the process of preparing a production budget. Past experience has shown that end-of-month inventory levels must equal 10% of the following months unit sales. Julys Beginning finished goods inventory is 4000 units.

3. Prepare a production budget by month and in total, for the third quarter (July, August, September).

Problem 1
a. Prepare a schedule of expected cash collections from sales for the third quarter (July, August, September).
	July	August	September	Total
Beginning balance accounts receivable
July sales
August sales
September sales
Total cash collections
b. Accounts receivable balance (end of September):
c. Prepare a production budget by month and in total, for the third quarter (July, August, September).
	July	August	September	Total