Question

Feeney Furniture prepared the following sales budget: Month March April May June Cash Sales Credit Sales $11,000 0 $11,000 0 37,000 $51,000 $17,000 $39,00 $45,000 $60,000 Credit collections are 5% two months following the sale, 30% in the month following the sale, and 62% in the month of sale. The remaining 3% is expected to be uncollectible What are the total cash collections in June at Feeney Furniture? OA. $111,000 B. $103.270 OC. $20.470 O D. $43,270

Answer 1

Answer:

Option (B) is correct.

Explanation:

Total cash collections in June:

= Cash sales + (62 percent of June credit sales) + (30 percent of May credit sales) + (5 percent of April credit sales)

= $60,000 + ($51,000 × 0.62) + ($37,000 × 0.30) + ($11,000 × 0.05)

= $103,270

Therefore, the total cash collections in June at Feeney Furniture is $103,270.