Morrow Corporation makes all sales on account. The June 30th balance sheet balance in its accounts receivable is $400,000, of which $240,000 pertain to sales that were made during June. Budgeted sales for July are $1,250,000. Morrow collects 70% of sales in the month of sale; 20% in the following month; and the final 10% in the second month after the sale.
a) What are Morrow's budgeted collections for July?
b) What is the budgeted balance of Morrow's accounts receivable as of July 31?