Question

The budget director of Heather’s Florist has prepared the following sales budget. The company had $310,000 in accounts receivable on July 1. Heather’s Florist normally collects 100 percent of accounts receivable in the month following the month of sale.
Required:
Complete the schedule of cash receipts by filling in the missing amounts.
Determine the amount of accounts receivable the company will report on its third-quarter pro forma balance sheet.


July August September
Sales Budget
Cash sales $40,000 $42,500 $45,000
Sales on account 45,000 54,000 64,800
Total budgeted sales $85,000 $96,500 $109,800
Schedule of Cash Receipts
Current cash sales $40,000 $42,500 $45,000
Plus: Collections from-
accounts receivable 50,000 45,000 54,000
Total budgeted-
collections $90,000 $87,500 $99,000

Answer 1

Answer:

a. The preparation of the schedule of cash receipts by filling in the missing amounts is shown below:-

b. $64,800

Explanation:

a.                                       July       August        September

Sales Budget

Cash sales                       $40,000    $42,500       $45,000

Sales on account             $45,000  $54,000        $64,800

Total budgeted sales      $85,000   $96,500      $109,800

Schedule of Cash Receipts

Current cash sales         $40,000    $42,500       $45,000

Add: Collections from-

accounts receivable      $50,000    $45,000       $54,000

Total budgeted-

collections                     $90,000     $87,500        $99,000

b. 2) Account receivable will report on its third quarter balance sheet is $64,800