Assume 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 or the end of March and for the end of June?

Rich Jackson, a recent finance graduate, is planning to go into the wholesale building supply business with his brother, Jim, who majored in building construction. The firm would sell primarily to general contractors, and it would start operating next January. Sales would be slow during the cold months, rise during the spring, and then fall off again in the summer, when new construction in the area slows. Sales estimates for the first 6 months are as follows (in thousands of dollars):

The terms of sales are net 30, but because of special incentives, the brothers expect 30% of the customers (by dollar value) to pay on the 10th day following the sale, 50% to pay on the 40th day, and the remaining 20% to pay on the 70th day. No bad debt losses are expected because Jim, the building construction expert, knows which contractors are having financialproblems.

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Predicted A/R-to Predicted Contribution to Receivables Month Predicted Sales Sales Ratio lanuary $150 February March 300 500 60 350 Projected March 31 A/R balance $410 0% 20 70 April May June $400 300 200 Projected June 30 A/R balance ayS200 100 $100 arch S300 Mav January February April 300 June 200