The Pots Company has obtained the following sales forecast data: January; cash $

Question

The Pots Company has obtained the following sales forecast data:

January; cash $80,000, credit $240,000
February; cash $70,000, credit $220,000
March; cash $50,000, credit $180,000
April; cash $60,000, credit $200,000

The regular pattern of collection of credit sales is 20% in the month of the sale, 70% in the month following the month of the sale, and the remainder in the second month following the month of the sale. There are no bad debts. The budgeted cash receipts for April are:
a.$248,000. b. $188,000. c. $226,000. d. $278,000.

please show work

Explanation / Answer

sales for the month Jan Feb Mar April May Jan 48000 168000 24000 Feb 44000 154000 22000 Mar 36000 126000 18000 April 40000 140000 May June Total 48000 212000 214000 188000 158000 Cash sales 80000 70000 50000 60000 Grand Total 128000 282000 264000 248000 158000 The correct option is A) $248,000

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