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e following expected total sales: onth Sales

e following expected total sales: onth Sales

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Grounded Gadgets' sales budget shows the following expected total sales: Month Sales January $120,000 February $160,000 March $140,000 April $120,000 The company expects 70% of its sales to be on account (credit sales). Credit sales are collected as follows: 40% in the month of sale, 57% in the month following the sale with the remainder being uncollectible and written off in the month following the sale. Required: a) Calculate budgeted accounts receivable at the end of each month from February through April. b) Calculate budgeted cash inflows from collection of receivables for each month from February through April.
Transcribed Image Text:Grounded Gadgets' sales budget shows the following expected total sales: Month Sales January $120,000 February $160,000 March $140,000 April $120,000 The company expects 70% of its sales to be on account (credit sales). Credit sales are collected as follows: 40% in the month of sale, 57% in the month following the sale with the remainder being uncollectible and written off in the month following the sale. Required: a) Calculate budgeted accounts receivable at the end of each month from February through April. b) Calculate budgeted cash inflows from collection of receivables for each month from February through April.
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