Shown below are the budgeted sales for ABC Company for the next six months: Sale

Question

 Shown below are the budgeted sales for ABC Company for the next six months: 

                    Sales for Cash     Sales on Account January               $18,000             $ 70,000  February              $15,000             $ 90,000  March                 $24,000             $120,000  April                 $19,000             $100,000  May                   $26,000             $130,000  June                  $14,000             $ 95,000 

 On average, 30% of the sales on account are collected in the month of sale, 40% are collected in the month following sale, 10% are collected in the second month following sale, and the remaining 20% is collected three months after the month of sale. 

 Calculate the expected cash collections for April. Do not use decimals in your answer. 

Explanation / Answer

Statement showing computations Particulars Amount Cash Sales for April                  19,000.00 Collection of April Sales in April Month @30% =100,000*30%                  30,000.00 Collection of March Sales in April Month @40% = 120,000*40%                  48,000.00 Collection of Feb Sales in April Month @10% = 90,000*10%                    9,000.00 Collection of Jan Sales in April Month @20% =70,000*20%                  14,000.00 Total Collections for April Month                120,000.00

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