Question: Assume that it is now July of year 1, and the brothers are developing pro forma financial statements for the following year. Further, assume that

Assume that it is now July of year 1, and the brothers are developing pro forma financial statements for the following year. Further, assume that sales and collections in the first half-year matched the predicted levels. Using the year 2 sales forecasts as shown next, what are next year's pro forma receivables levels for the end of March and for the end of June?

Predicted Predicted Predicted contribution A/R-to-sales ratio to receivables Month sales $150 Jan Feb 300 20 60 Mar 500

Predicted Predicted Predicted contribution A/R-to-sales ratio to receivables Month sales $150 Jan Feb 300 20 60 Mar 500 70 350 Projected March 31 A/R balance = $410 %3! $400 Apr May 300 Jun 200 Projected June 30 A/R balance =

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