Question:
Company A is expecting to sell 10,000 cases in July, 20,000 cases in August, and 30,000 in September of Year 2. Selling price per case is $30. All sales are on account. The sales are collected 70% in the month of sale and 30% in the month following sale. June sales totaled $200,000. Bad debts are negligible and can be ignored.
Required:
a) Prepare a sales budget.
b) Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter.
c) Assume that the company will prepare a budgeted balance sheet as of September 30. Determine the accounts receivable as of that date.