Bright Minds Toy Company Prepared the Following Sales Budget for the Second

question 10

Multiple Choice

Bright Minds Toy Company prepared the following sales budget for the second quarter.Projected sales for each of the first three months of operations are as follows: $\begin{array}{lccc}\text {Sales Budget}& \text { April } & \text { May } & \text { June}\\\text {Cash Sales}&30,000 & 43,000&55,000 \\\text { Sales on Account}&370,0 & 432,000&405,000 \\&400,000&475,000&460,000\end{array}$
Bright Minds expects to collect 70% of the sales on account in the month of sale,20% in the month following the sale,and the remainder in the second month following the sale.
What is the ending accounts receivable balance that would be reported on the pro forma balance sheet prepared as of June 30?

• A) $164,700
• B) $121,500
• C) $283,500
• D) $86,400

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Definitions:

Business Fluctuations

Variations in the growth rate of an economy over time, including periods of expansion and contraction.

Money Supply

The overall volume of fiscal assets in an economy, which includes cash, coins, and amounts in checking and savings accounts, at a certain time.

Rational Expectations

An economic theory suggesting that individuals make predictions about future economic events using all available information in an unbiased and informed manner.

Discretionary Policies

Economic policies based on the judgment and decisions of policymakers, as opposed to set rules or formulas, often involving changes in government spending or taxation.