Please explain why and how as I don't get this part of the question below "The accounts receivable balance on January 1 of the current year was $70,000, of which $50,000 represents uncollected December sales and $20,000 represents uncollected November sales". Here is the question: (please show me the steps thoroughly) The LaGrange Corporation had the following budgeted sales for the first half of the current year: Cash Sales Credit Sales January........ $70,000 $340,000 February...... $50,000 $190,000 March.......... $40,000 $135,000 April............. $35,000 $120,000 May............. $45,000 $160,000 June............ $40,000 $140,000 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: Collections on sales: 60% in month of sale 30% in month following sale 10% in second month following sale The accounts receivable balance on January 1 of the current year was $70,000, of which $50,000 represents uncollected December sales and $20,000 represents uncollected November sales. The total cash collected during January by LaGrange Corporation would be?
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.
Please explain why and how as I don't get this part of the question below "The accounts receivable balance on January 1 of the current year was $70,000, of which $50,000 represents uncollected December sales and $20,000 represents uncollected November sales".
Here is the question: (please show me the steps thoroughly)
The LaGrange Corporation had the following budgeted sales for the first half of the current year:
|
|
|
Cash Sales |
Credit Sales |
|
|
January........ |
$70,000 |
$340,000 |
|
|
February...... |
$50,000 |
$190,000 |
|
|
March.......... |
$40,000 |
$135,000 |
|
|
April............. |
$35,000 |
$120,000 |
|
|
May............. |
$45,000 |
$160,000 |
|
|
June............ |
$40,000 |
$140,000 |
The company is in the process of preparing a
|
|
Collections on sales: |
|
|
60% in month of sale |
|
|
30% in month following sale |
|
|
10% in second month following sale |
The accounts receivable balance on January 1 of the current year was $70,000, of which $50,000 represents uncollected December sales and $20,000 represents uncollected November sales.
The total cash collected during January by LaGrange Corporation would be?
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