Mitchell Company had the following budgeted sales for the last half of last year:
July Cash sales = $50,000; Credit sales = $150,000
August Cash sales = 55,000; Credit sales = 170,000
September Cash sales = 45,000; Credit sales = 130,000
October Cash sales = 50,000; Credit sales = 145,000
November Cash sales = 60,000; Credit sales = 200,000
December Cash sales = 80,000; Credit sales = 350,000
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:
60% in month of sale
30% in month following sale
10% in second month following sale
1. Assume that the accounts receivable balance on July 1 was $75,000. Of this amount, $60,000 represented uncollected June sales and $15,000 represented uncollected May sales. Given these data, the total cash collected during July would be:
2. What is the budgeted accounts receivable balance on December 1.