Richards Corporation has the following budgeted sales for the first half of next

Question

Richards Corporation has the following budgeted sales for the first half of next year: Cash Sales Credit Sales January $60,000 $160,000 February $65,000 $180,000 March $55,000 $140,000 April $60,000 $155,000 May $70,000 $210,000 June $90,000 $450,000 The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled: Collections on credit sales: 45% in month of sales 35% in month of following sales 20% in second month following sales The accounts receivable balance on January 1 is $85,000. Of this amount, $55,000 represents uncollected December sales and $30,000 represents uncollected November sales. What is the budgeted accounts receivable balance on May 30? $115,500 $146,500 $55,000 $201,500

Explanation / Answer

The budgeted account receivable balance is 146,500.
April credit sale will be fully collected by June.

But we need to find out Accounts Receivebale till MAy 30

So, April credit sale of 20% will be left =20%*155,000 = 31,000

And May 55% of credit sale will be left = 55%*210,000 = 115,500

Total for MAy will be = $146,500

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