The LaGrange Company had the following budgeted sales for the first half of the

Question

The LaGrange Company had the following budgeted sales for the first half of the current year: Picture 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 sales: 60% in month of sale 30% in month following sale 10% in second month following sale The accounts receivable balance on January 1 of the current year was $70,000, of which $50,000 represents uncollected December sales and $20,000 represents uncollected November sales.

Explanation / Answer

Note: Other Sales Detail are not available

January
February









November sales on account:



Collected in January
$      20,000






December sales on account:



Collected in January
$      37,500

Collected in February

$         12,500



Total cash collected
$      57,500
$         12,500

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