Celina is developing a forecast for cash receipts for the first quarter of the year. Credit sales

Question:

Celina is developing a forecast for cash receipts for the first quarter of the year. Credit sales for the quarter are estimated to be $640,000. The Accounts Receivable balance from the fourth quarter of the prior year is $600,000. All other accounts receivable from the prior year have been collected or written off. On average, collections of 50% occur during the quarter, 30% in the next quarter, and 15% two quarters after a sale. At the end of the year, 5% are written off as uncollectible.

REQUIRED

Calculate the budgeted cash receipts for the first quarter from credit sales.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...