Question

Towing Company has budgeted sales for the next six months as follows:

                   Sales for Cash     Sales on Account 
May                   $42,000             $257,000
June                  $37,000             $243,000
July                  $29,000             $238,000
August                $48,000             $296,000
September             $52,000             $251,000
October               $45,000             $263,000

On average, 32% of the sales on account are collected in the month of
sale, 40% are collected in the month following sale, 16% are collected
in the second month following sale, 8% are collected in the third month
following sale, and the remaining 4% is collected four months after the
month of sale.

Calculate Towing Company's budgeted accounts receivable at October 31.

Answer 1