Problem:
(Budgeted income, cash, accounts receivable) In preparing its budget for July 2000, Expert Legal Services has the following accounts receivable information available:
|
Accounts Receivable at June 30
|
$500,000
|
|
Estimated credit sales for July
|
600,000
|
|
Estimated collections in July for credit sales in July and prior months
|
440,000
|
|
Estimated write-offs in July for uncollectible credit sales
|
32,000
|
|
Estimated provision for uncollectible accounts for credit sales in July
|
24,000
|
a. What is the projected balance of Accounts Receivable at July 31, 2000?
b. Which of the above amounts (if any) will affect the cash budget?
c. Which of the above amounts (if any) will affect the pro forma income statement for July? (CPA adapted)