Problem - The following is the sales budget for the given months of Welco, Ltd.:
|
Cash Sales
|
Credit Sales
|
|
May
|
$59,000
|
$283,000
|
|
June
|
$43,000
|
$236,000
|
|
July
|
$33,000
|
$205,000
|
|
August
|
$47,000
|
$268,000
|
|
September
|
$46,000
|
$197,000
|
Additional information to be used determining the expected cash collections each month that will be used in preparing the cash budget:
Collections on Credit sales:
50% in month of sale
20% in month following sale
30% in second month following sale
The Accounts Receivable balance on May 1 was $53,000. Of this amount, $41,000 represented uncollected April sales and $12,000 represented uncollected March sales.
Part 1: What is the expect cash to be collected in May?
Part 2: The budgeted Accounts Receivable on September 1 would be:
- $195,500
- $202,900
- $178,900
- $224,900
- $173,300