Spacely Sprockets' sales budget shows the following expected total sales: Month Sales January $30,000 February $40,000 March April $35,000 $30,000 The company expects 80% of its sales to be on account (credit sales). Credit sales are collected as follows: 30% in the month of sale and 68% 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.

Spacely Sprockets' sales budget shows the following expected total sales: Month Sales January $30,000 February $40,000 March April $35,000 $30,000 The company expects 80% of its sales to be on account (credit sales). Credit sales are collected as follows: 30% in the month of sale and 68% 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.

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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