Bright Minds Toy Company prepared the following sales budget for the second quarter. Projected sales for each of the first three months of operations are as follows: Bright Minds expects to collect 70% of the sales on account in the month of sale, and 20% in the month following the sale, and the remainder in the second month following the sale.
What is the ending accounts receivable balance that would be reported on the pro forma balance sheet prepared as of June 30?

Question

Bright Minds Toy Company prepared the following sales budget for the second quarter. Projected sales for each of the first three months of operations are as follows:  Bright Minds expects to collect 70% of the sales on account in the month of sale, and 20% in the month following the sale, and the remainder in the second month following the sale.
What is the ending accounts receivable balance that would be reported on the pro forma balance sheet prepared as of June 30?

Quizplus · Accepted Answer

Budgeted accounts receivable balance on June 30 = (May credit sales × Percent uncollected) + (June credit sales × Percent uncollected)
Budgeted accounts receivable balance on June 30 = [$432,000 × (100% - 70% - 20%)] + [$405,000 × (100% - 70%) = $43,200 + $121,500 = $164,700

Bright Minds Toy Company Prepared the Following Sales Budget for the Second