Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Hi there,

I have attached the problem I'm working on. Can you please show me, step-by-step, how to solve for:

The total budgeted cash collections for July

The budgeted accounts receivable balance on December 31, 2021

MJ5 Co. had the following budgeted sales for the last half of 2021:
July
$
200,000
August
$
225,000
September
$ 175,000
October
$ 195,000
November
$ 260,000
December
420,000
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:
20% of sales are in cash
Collection on credit sales:
60% in the month of sale
30% in the month following sale
10% in the second month following sale
The accounts receivable balance on July 1, 2021 consisted of the following:
Uncollected June sales
$
60,000
Uncollected May sales
$
15,000
Total Accounts Receivable
$
75,000
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Transcribed Image Text:MJ5 Co. had the following budgeted sales for the last half of 2021: July $ 200,000 August $ 225,000 September $ 175,000 October $ 195,000 November $ 260,000 December 420,000 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: 20% of sales are in cash Collection on credit sales: 60% in the month of sale 30% in the month following sale 10% in the second month following sale The accounts receivable balance on July 1, 2021 consisted of the following: Uncollected June sales $ 60,000 Uncollected May sales $ 15,000 Total Accounts Receivable $ 75,000
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