Budgeted sales for the first quarter of the year for the Delta Company are as follows:
]Budgeted Sales
January ........$400,000
February .......$200,000
March.........$600,000
1.The Company normally collects 60% in the month of sale and 30% in the month following the sale. Ten percent of all sales are uncollectible and are written off in the following month.
2.The balance in accounts receivable at January 1 was $100,000, which represents 40% of December sales.