Madden Inc. has the following sales budget for the months indicated: $250,000 20

Question

Madden Inc. has the following sales budget for the months indicated:

$250,000

200,000

230,000

220,000

10

Collections on account have been determined to follow the pattern below:

60% of sales collected in the month of sale

25% of sales collected in the month after the sale

12% of sales collected two months after the sale

3% of sales is uncollectible

Cash collections for April would be:

$219,800

$226,400

$214,800

$213,500

$250,000

200,000

230,000

220,000

10

Explanation / Answer

Cash collections for April = (200000*12%)+(230000*25%)+(220000*60%)= $213500 Option D is correct

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