Question

Seventy percent of Pitkin Corporation's sales are collected in the month of sale, 20% in the month following sale, and 10% in the second month following sale. The following are budgeted sales data for the company: January February March April Budgeted sales $200,000 $300,000 $350,000 $250,000 Total budgeted cash collections in April would be: Multiple Choice $175,000 $275,000 $70,000 $30,000

Answer 1

Answer:

$275,000

Explanation:

Cash collections in April = 70% of sales in April +20% sales in March + 10% sales in Febuary

= 70% * $250,000 + 20% * $350,000 + 10% * $300,000

= $275,000