Southern Mills is a textile manufacturing company in eastern Tennessee. Every year the company prepares a complete set of budgets. The budgeting process begins with information supplied by the Sales and Marketing department.
The balance in Accounts Receivable at the beginning of the year was $900 000. The marketing department has predicted unit sales to be as follows:
Selling price for the fabric is $2.00 per square yard. Cash sales account for 25% of sales. Collections on account (non-cash sales charged to accounts receivable) are received 60% in the month of the sale and 40% in the following month.
Required:

Question

Southern Mills is a textile manufacturing company in eastern Tennessee. Every year the company prepares a complete set of budgets. The budgeting process begins with information supplied by the Sales and Marketing department.
The balance in Accounts Receivable at the beginning of the year was $900 000. The marketing department has predicted unit sales to be as follows:
  Selling price for the fabric is $2.00 per square yard. Cash sales account for 25% of sales. Collections on account (non-cash sales charged to accounts receivable) are received 60% in the month of the sale and 40% in the following month.
Required:

Quizplus · Accepted Answer

The Answer of Southern Mills is a textile manufacturing company in eastern Tennessee. Every year the company prepares a complete set of budgets. The budgeting process begins with information supplied by the Sales and Marketing department.
The balance in Accounts Receivable at the beginning of the year was $900 000. The marketing department has predicted unit sales to be as follows:
  Selling price for the fabric is $2.00 per square yard. Cash sales account for 25% of sales. Collections on account (non-cash sales charged to accounts receivable) are received 60% in the month of the sale and 40% in the following month.
Required:

Southern Mills Is a Textile Manufacturing Company in Eastern Tennessee