On October 1 of the current year, Molloy Corporation prepared a cash budget for

Question

On October 1 of the current year, Molloy Corporation prepared a cash budget for October, November, and December. All of Molloy's sales are made on account. The following information was used in preparing estimated cash collections:

Approximately 65% of all sales are collected in the month of the sale, 20% is collected in the following month, and 15% is collected in the month thereafter.

$131,000.

$36,000.

$28,950.

$45,450.

$55,450.

$161,000.

$64,000.

$65,500.

$63,000.

$171,000.

$60,500.

$58,950.

On October 1 of the current year, Molloy Corporation prepared a cash budget for October, November, and December. All of Molloy's sales are made on account. The following information was used in preparing estimated cash collections:

  August sales (actual) $ 47,000   September sales (actual) $ 57,000   October sales (estimated) $ 27,000   November sales (estimated) $ 77,000   December sales (estimated) $ 67,000

Explanation / Answer

1 )correct option is " b)

2)correct option is "C" -64000

3)correct option is "A" -63000

collection from oct nov dec August sales   7050          (47000 *.15) sep sales 11400        (57000*.20) 8550    (57000*.15) oct slaes 17550       (27000*.65) 5400   (27000*.20) 4050    (27000*.15) nov sales 50050 (77000*.65) 15400   (77000*.20) dec sales 43550    (67000*.65) Total collection 36000 64000 63000

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