Question

Crocetti Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit$ 121 Budgeted unit sales (all on credit): January7,000 February7,500 March11,900 April14,900 Credit sales are collected: 40% in the month of the sale 60% in the following month The budgeted accounts receivable balance at the end of February is closest to

Answer 1

Answer:

$544,500

Explanation:

The Trade Receivable Budget is prepared to determine the Accounts Receivable Balance at the end of February.

However the Sales Budget comes first before the Trade Receivable Budget.

Sales Budget :

Month                        January             February                 March

Units                            7,000                 7,500                    11,900

Selling Price                 $ 121                   $ 121                      $ 121

Total Sales              $847,000          $907,500            $1,439,900

Trade Receivables Budget :

Month                       January            February

Balance b/f                   $0                 $508,200

Credit Sales            $847,000          $907,500

Receipts - 40 %     ($338,800)        ($363,000)

Receipts - 60 %            $0               ($508,200)

Balance c/f             $508,200          $544,500