Richards Corporation has the following budgeted sales for the first half of next year:

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:

The accounts receivable balance on January 1 is $70,000. Of this amount, $60,000 represents uncollected December sales and $10,000 represents uncollected November sales.
-What is the budgeted accounts receivable balance on May 30?

Question

Richards Corporation has the following budgeted sales for the first half of next year:

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:

The accounts receivable balance on January 1 is $70,000. Of this amount, $60,000 represents uncollected December sales and $10,000 represents uncollected November sales.
-What is the budgeted accounts receivable balance on May 30?

Quizplus · Accepted Answer

Budgeted accounts receivable balance = (Sales for May * Credit sales as a percentage of total sales) - (Collections from customers during May)= ($120,000 * 70%) - ($60,000)= $84,000 - $60,000= $24,000Add the beginning balance of accounts receivable to get the ending balance:$24,000 + $60,000 = $84,000

Richards Corporation Has the Following Budgeted Sales for the First