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Managerial Accounting

Use the following to answer both questions:

The Pann Co. has obtained the following sales forcast data:
July August September October
Cash sales........$80,000 $70,000 $50,000 $60,000
Credit sales......$240,000 $220,000 $180,000 $200,000

The regular pattern of collection of credit sales is 20% in the month of sale, 70% in the month following the month of sale, and the remainder in the 2nd month following the month of sale. There are no bad debts.

1. The budgeted ACCOUNTS RECEIVABLE BALANCE ON SEPTEMBER 30 is:
A)$126,000
B)$148,000
C)$166,000
D)$190,000

2. The budgeted CASH RECEIPTS FOR OCTOBER are:
A)$188,000
B)$248,000
C)$226,000
D)$278,000

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