Mitchell Company had the following budgeted sales for the last half of last year:
| Cash Sales | Credit Sales | |
| July | $50,000 | $150,000 |
| August | $55,000 | $170,000 |
| September | $56,000 | $130,000 |
| October | $61,000 | $156,000 |
| November | $71,000 | $200,000 |
| December | $80,000 | $460,000 |
|
The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled: |
| Collections on credit sales: |
| 50% in month of sales |
| 30% in month of following sales |
| 20.0% in second month following sales |
|
Assume that the accounts receivable balance on July 1 was $76,000. Of this amount, $50,000 represented uncollected June sales and $26,000 represented uncollected May sales. Given these data, the total cash collected during July would be: |
| $256,000 | |
| $247,000 | |
| $181,000 | |
| $100,000 |