| Richards Corporation has the following budgeted sales for the first half of next year: |
|
Cash Sales |
Credit Sales |
| January |
$70,000 |
$170,000 |
| February |
$75,000 |
$190,000 |
| March |
$50,000 |
$150,000 |
| April |
$55,000 |
$150,000 |
| May |
$65,000 |
$220,000 |
| June |
$100,000 |
$400,000 |
|
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 credit sales: |
| 45% in month of sales |
| 40% in month of following sales |
| 15.0% in second month following sales |
|
The accounts receivable balance on January 1 is $64,000. Of this amount, $44,000 represents uncollected December sales and $20,000 represents uncollected November sales.
|
| The total cash collected during January would be: |
$80,000$296,000$198,500$261,000
