Sugarland Company sells a single product and anticipates opening a new facility inCharlotteon May 1 of the current year.
Expected sales during the first three months of activity are:
May, $60,000; June, $80,000; and July, $85,000.
Thirty percent of all sales are for cash; the remaining 70% are on account.
Credit sales have the following collection pattern:
Collected in the month of sale 60%
Collected in the month following sale 35%
Uncollectible 5%
a. Prepare a schedule of cash collections for May through July.
b. Compute the expected balance in Accounts Receivable as of July 31.