Question

Shown below are the budgeted sales for ABC Company
for the next six months:

              Sales for Cash     Sales on Account 
January          $27,000             $226,000
February         $33,000             $299,000
March            $21,000             $273,000
April            $24,000             $241,000
May              $38,000             $213,000
June             $19,000             $201,000

On average, 14% of the sales on account are collected
in the month of sale, 38% are collected in the month
following sale, 43% are collected in the second month
following sale, and the remaining 5% is collected three
months after the month of sale.

Part A.) Calculate the expected cash collections for April.

Part B.) Calculate ABC Company's budgeted accounts receivable at June 30.

Answer 1

A)

Expected Cash Collections
	April
Cash Sales	$         24,000
From Credit Sales
January	$         11,300
February	$      128,570
March	$      103,740
April	$         33,740
Total Cash Collections	$      301,350

B)

Accounts Receivable
	April
From Credit Sales
February	$         14,950
March	$      131,040
April	$      207,260
Total	$      353,250