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I need Accounting help!!!?
The HW question was:
Ross Corporation makes all sales on account. The June 30th balance sheet balance in its accounts receivable is $400,000, of which $240,000 pertain to sales that were made during June. Budgeted sales for July are $1,250,000. Ross collects 70% of sales in the month of sale; 20% in the following month; and the final 10% in the second month after the sale
What is Ross's budgeted collections for July?
1 Answer
- JKRBLv 79 years agoFavorite Answer
According to the information given, cash collections for June will come from May, June, and July sales. At the end of June there is a $400,000 balance in accounts Receivable, of which $240,000 is for June sales. This means that the remaining $160,000 is from May and will be paid in July.
240,000 / 30% = $800,000 June sales
800,000 x 20% = $160,000 of June sales collected in July
1,250,000 x 70% = $875,000 cash collected in July from July sales
160,000 + 160,000 + 875,000 = $1,195,000 cash collected in July.
Source(s): Accounting Fan
