8 Our budgeted cash and total sales in the second quarter of 2018 are below: Apr

Question

8 Our budgeted cash and total sales in the second quarter of 2018 are below: April May June merch Cash Sales Total Sales $55,000 $250,000 $60,000 $275,000 565,000 $280,000 We expect to collect our credit sales as follows: 60% in the month thesa e s made; 30% in the month following sale; and 10 % in the second month following sale. Our budgeted ending balance of accounts receivable on March 31 is $90,000 (this includes $75,000 budgeted uncollected March sales and $15,000 budgeted uncollected February sales). What is the amount of our budgeted cash collections in April? 40% Feb. IS, 000 A. $ 209,500 $ 243,250 C. S 276,250 D. S 262,000 E. None of the above

Explanation / Answer

Answer:-Total budgeted cash collections in April=$243250 (Option B).

Explanation:-Cash sales (April)+60 % of credit sales (April)+March month sales (30%)+February month sales (15%)

=$55000+($250000-$55000)*60%+($75000/40%)*30%+$15000

=$55000+$117000+$56250+$15000

=$243250

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