Question

Judge Company's budgeted sales for the next five months are
given below:

             Budgeted Sales
January         $149,000                        
February        $274,000
March           $373,000
April           $167,000
May             $232,000

20% of Judge Company's sales are cash sales and the other 80%
are sales on account. The sales on account are collected in
the pattern:

22% collected in the month of sale
35% collected in the month following sale
27% collected in the second month following sale
11% collected in the third month following sale
5% collected four months after the month of sale

Calculate Judge Company's budgeted accounts receivable balance
at May 31.

Answer 1

Answer:

Budgeted Account Receivable balance at May 31 = $260920.

Explanation:

Computation of budgeted Account Receivable balance at May 31:

January sale on Account has been totally received till May 31.

February sale on Account Due till May 31 = ($274000 x 80% ) x 5% = $10960

March sale on Account Due till May 31 = ($373000 x 80% ) x 16% = $47744

April sale on Account Due till May 31 = ($167000 x 80% ) x 43% = $57448

May sale on Account Due till May 31 = ($232000 x 80% ) x 78% = $144768

Total Account Receivable Balance as on May 31 = $10960 + $47744 + $57448 + $144768 = $260920.