Richards Company Has the Following Budgeted Sales for the First

question 2

Multiple Choice

Richards Company has the following budgeted sales for the first half of next year: The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:
Collections on credit sales:
60% in month of sale
30% in month following sale
10% in second month following sale
-What is the budgeted accounts receivable balance on May 31?

• A) $81,000
• B) $68,000
• C) $60,000
• D) $141,000

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Definitions:

Classifies

To arrange or categorize entities based on shared characteristics or criteria.

Transactions

The exchange or transfer of goods, services, or funds between two or more parties, recorded in the financial records of the entities involved.

Measurement System

A collection of instruments, standards, and procedures used to quantify physical properties.

Business Activities

All actions undertaken by a company to operate and manage its business, which may include investing, financing, and operating activities.