The LaPann Company has obtained the following sales forecast data:

The LaPann Company has obtained the following sales forecast 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 second month following the month of sale. There are no bad debts.

      68. The budgeted accounts receivable balance on September 30 is:

            A)      $126,000

            B)      $148,000

            C)      $166,000

            D)      $190,000

           

            Ans:  C     AACSB:  Analytic     AICPA BB:  Critical Thinking     AICPA FN:  Reporting     LO:  2     Level:  Medium

            Solution:

           

	September sales ($180,000 × 80%*)..	$144,000
	August sales ($220,000 × 10%**)......	22,000
	Total....................................................	$166,000

*100% − 20%

**100% − 20% − 70%

      69. The budgeted cash receipts for October are:

            A)      $188,000

            B)      $248,000

            C)      $226,000

            D)      $278,000

           

            Ans:  B     AACSB:  Analytic     AICPA BB:  Critical Thinking     AICPA FN:  Reporting     LO:  2     Level:  Medium

           Solution:

           

	October cash sales.........................................	$  60,000
	October credit sales ($200,000 × 20%).........	40,000
	September credit sales ($180,000 × 70%).....	126,000
	August credit sales ($220,000 × 10%)..........	22,000
	Total...............................................................	$248,000