10. (TCO 2) Information pertaining to Brenton Corporation\'s sales revenue is pr

Question

10. (TCO 2) Information pertaining to Brenton Corporation's sales revenue is presented in the following table:
February March April

Cash Sales $160,000 $150,000 $120,000
Credit Sales 300,000 400,000 280,000
Total Sales $460,000 $550,000 $400,000

Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 60% are collected in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month are 70% of the next month's projected total sales. ll purchases of inventory are on account; 25% are paid in the month of purchase, and the remainder is paid in the month following the purchase.

Brenton's budgeted total cash receipts in March are

(Points : 3)


$478,000.
$457,000.
$492,000.
$428,000.

Explanation / Answer

0. (TCO 2) Information pertaining to Brenton Corporation's sales revenue is presented in the following table:
February March April

Cash Sales $160,000 $150,000 $120,000
Credit Sales 300,000 400,000 280,000
Total Sales $460,000 $550,000 $400,000

Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 60% are collected in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month are 70% of the next month's projected total sales. ll purchases of inventory are on account; 25% are paid in the month of purchase, and the remainder is paid in the month following the purchase.

Brenton's budgeted total cash receipts in March are

(Points : 3)


$478,000.
$457,000.
$492,000.
$428,000.

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