Question

The Model Company is to begin operations in April. It has budgeted April sales of $30,000, May sales of $34,000, June sales of $40,000, July sales of $42,000, and August sales of $38,000. Note that 10% of each month's sales will represent cash sales; 75% of the balance will be collected in the month following the sale, 17% the second month, 6% the third month, and the balance is bad debts. What is the amount of cash to be collected in the month of July?

Answer 1

Answer:

so Budgeted cash collections in June  is $121500

Explanation:

given data

sale in month R1 =  15% = 0.15

sale month following R2 = 75% = 0.75

sale second month R3 = 5%  = 0.05

sale uncollectible R4 = 5% = 0.05

Sales April A =  $ 198,000

Sales May M =  $  117,000

Sales June J =  $ 159,000

to find out

Budgeted cash collections in June

solution

we will find june Budgeted cash so

we will apply here formula that is

june collection = J × R1 ÷  M × R2 ÷ A × R3

put all value we get june collection

june collection = 159,000  × 0.15 +  117,000  × 0.75 + 198,000 × 0.05

june collection = 121500

so Budgeted cash collections in June  is $121500