Spacely Sprockets' sales budget shows the following expected total sales:
$$\begin{array} { l r }
\quad \text { Month } & \text { Sales } \
\text { January } & \$ 30,000 \
\text { February } & \$ 40,000 \
\text { March } & \$ 35,000 \
\text { April } & \$ 30,000
\end{array}$$ The company expects 80% of its sales to be on account (credit sales). Credit sales are collected as follows: 30% in the month of sale and 68% in the month following the sale, with the remainder being uncollectible and written off in the month following the sale.
Required:Calculate budgeted accounts receivable at the end of each month from February through April.Calculate budgeted cash inflows from collection of receivables for each month from February through April.

Question

Spacely Sprockets' sales budget shows the following expected total sales:
 $$\begin{array} { l r } 
\quad \text { Month } & \text { Sales } \
\text { January } & \$ 30,000 \
\text { February } & \$ 40,000 \
\text { March } & \$ 35,000 \
\text { April } & \$ 30,000
\end{array}$$ The company expects 80% of its sales to be on account (credit sales). Credit sales are collected as follows: 30% in the month of sale and 68% in the month following the sale, with the remainder being uncollectible and written off in the month following the sale.
Required:Calculate budgeted accounts receivable at the end of each month from February through April.Calculate budgeted cash inflows from collection of receivables for each month from February through April.

Quizplus · Accepted Answer

The Answer of Spacely Sprockets' sales budget shows the following expected total sales:
 $$\begin{array} { l r } 
\quad \text { Month } & \text { Sales } \
\text { January } & \$ 30,000 \
\text { February } & \$ 40,000 \
\text { March } & \$ 35,000 \
\text { April } & \$ 30,000
\end{array}$$ The company expects 80% of its sales to be on account (credit sales). Credit sales are collected as follows: 30% in the month of sale and 68% in the month following the sale, with the remainder being uncollectible and written off in the month following the sale.
Required:Calculate budgeted accounts receivable at the end of each month from February through April.Calculate budgeted cash inflows from collection of receivables for each month from February through April.

Spacely Sprockets' Sales Budget Shows the Following Expected Total Sales