A company is preparing budgets for the quarter ending Mar 31, 2020. Jan 10,000 units Feb 50,000 units Mar 30,000 units Apr 60,000 units May 40,000 units The management of this company assumes the following: 1) Selling price is $5. 2) On Dec 31, 2019, the finished goods totaled 3,000 units. Finished goods at the end of each month must be 20% of the following month’s budgeted sales. 3) All sales are on account. 70% of the credit sales are collected in the month of sale, 25% in the month following sale, and the remainders are uncollectible. 4) On Dec 31, 2019, the cash balance is $10,000. Question: Prepare the cash collection for each month for January, February, and March.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A company is preparing budgets for the quarter ending Mar 31, 2020.
Jan 10,000 units
Feb 50,000 units
Mar 30,000 units
Apr 60,000 units
May 40,000 units
The management of this company assumes the following:
1) Selling price is $5.
2) On Dec 31, 2019, the finished goods totaled 3,000 units. Finished goods at the end of each month must be 20% of the following month’s budgeted sales.
3) All sales are on account. 70% of the credit sales are collected in the month of sale, 25% in the month following sale, and the remainders are uncollectible.
4) On Dec 31, 2019, the cash balance is $10,000.

Question:

Prepare the cash collection for each month for January, February, and March.

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