Acme Company's budgeted monthly sales are as follows: September $617,000, October $892,000, November $750,000, and December $710,000. Sales are collected 15% in the month of sale, 65% in the month following the sale, and the remaining 20% in the second month following the sale. What is the budgeted accounts receivable balance on December 31? O $607,500 O $680.500 O $716,500 $753,500 O None of the above

Acme Company's budgeted monthly sales are as follows: September $617,000, October $892,000, November $750,000, and December $710,000. Sales are collected 15% in the month of sale, 65% in the month following the sale, and the remaining 20% in the second month following the sale. What is the budgeted accounts receivable balance on December 31? O $607,500 O $680.500 O $716,500 $753,500 O None of the above

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 34E: A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and...

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Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

Question

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Acme Company's budgeted monthly sales are as follows: September $617,000, October $892,000,
November $750,000, and December $710,000. Sales are collected 15% in the month of sale, 65% in
the month following the sale, and the remaining 20% in the second month following the sale. What
is the budgeted accounts receivable balance on December 31?
O $607.500
$680,500
O $716,500
$753,500
O None of the above

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Step 1: Introduce to cash collection budget

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Step 2: Working for % uncollected from customer on December 31

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Step 3: Working for accounts receivable balance at December 31

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