Dove Corporation began its operations on September 1 of the current year. Budget

Question

Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $250,000, $320,000, and $410,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale and 30% in the month following the sale.

?

The cash collections in November are

$317,750

$490,000

$389,750

$410,000

a.

$317,750

b.

$490,000

c.

$389,750

d.

$410,000

Explanation / Answer

Cash collection in november

So answer is c) $389750

November Cash sales (410000*25%) 102500 October credit Sales (320000*75%*30%) 72000 November credit sales (410000*75%*70%) 215250 Cash collection in november 389750

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