The budget director of Mandy's Kitchen Shop has prepared the following sales budget. The company had $50,000 of accounts receivable at January 1. The company normally collects 100 percent of its accounts receivable in the month following the sale.Required:(a) Complete the schedule of cash receipts by filling in the missing amounts. What are the total budgeted cash receipts for the first quarter.(b) Determine the amount of accounts receivable that Mandy's should report on the first quarter pro forma balance sheet.
What will be an ideal response?
Answers will vary
(a)
| Sales | January | February | March |
| Cash sales | $ 15,000 | $ 33,000 | $ 36,000 |
| Sales on account | 45,000 | 60,000 | 70,000 |
| Total budgeted sales | $ 60,000 | $ 93,000 | $ 106,000 |
| ? | ? | ? | ? |
| Schedule of cash receipts | ? | ? | ? |
| Current cash sales | $ 15,000 | $ 33,000 | $ 36,000 |
| Plus collection of accounts receivable | 50,000 | 45,000 | 60,000 |
| Total budgeted cash collections | $ 65,000 | $ 78,000 | $ 96,000 |
Total budgeted cash collections for the quarter are $239,000.
(b) The balance of accounts receivable at the end of the quarter is budgeted to be $70,000 (the amount of sales on account for March).
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