The LaPann Corporation has obtained the following sales forecast data: July August September October Cash sales $ 80,000 $ 70,000 $ 50,000 $ 60,000 Credit sales $ 240,000 $ 220,000 180,000 200,000The regular pattern of collection of credit sales is 20% in the month of sale, 70% in the following the month of sale and the remainder in the second month following the month of sale. There are no bad debts. Required:1. The budgeted accounts receivable balance on September 30 is:A) $126,000B) $148,000C) $166,000D) $190,0002. The budgeted cash receipts for October are:A) $188,000B) $248,000C) $226,000D) $278,000

1. 166,000

2. 188,000

Explanation:

The budgeted accounts receivable balance on September 30  and Budgeted cash receipts for october n be calculated as follows

July

Opening                          -

Credit sales                 240,000

Collection

20% of July                 48,000

Closing                      192,000

August

Opening                       192,000

Credit sales                 220,000

Total                             412,000

Collection

20% of August             44,000

70% of July                  168,000

Total receipts              208,000

Closing                         200,000

September

Opening                         200,000

Credit sales                    180,000

Total                               380,000

Collection

20% of september          36,000

70% of august                  154,000

10% of july                        24,000

Total receipts                  214,000

Closing                             166,000

October

Opening                         166,000

Credit sales                   200,000

Total                               366,000

Collection

20% of October               40,000

70% of september           126,000

10% of august                   22,000

Total receipt                     188,000

Closing                             178,000

previous business sales - c.