The following information relates to DFW Corporation, a local wholesale company:

• All sales are on account and are budgeted as follows: January, $710,000; February, $400,000. DFW typically collects 70% of its sales in the month of sale and 30% in the following month.
• Cost of goods sold averages 60% of sales.
• Cash operating expenses total $60,000 per month and are paid when incurred. Monthly depreciation equals $18,000.
• Amounts taken from the December 31, 2022 balance sheet are as follows: cash, 200,000; accounts receivable, $115,000; plant and equipment (net), $107,000; and retained earnings, $85,000.

Required: Complete the following three tasks. Show your calculations.

1. Prepare a budgeted income statement for January, 2023.
2. Calculate budgeted cash inflows for January.
3. Calculate the projected balance in Accounts Receivable at January 31, 2023.

Answer rating: 100% (QA)

1 Budgeted Income Statement for January 2023 Revenue January Sales 710000 February Sales collected i... View the full answer