Question

Seventy percent of Pluto Corporation's sales are collected in the month of sale, 20% in the month following sale, and 10% in the second month following sale. All sales are on account. The following are budgeted sales data for the company:

Answer 1

Answer:

$275,000

Explanation:

month             budgeted sales           budgeted cash collections

January            $200,000                               $140,000

February          $300,000                  $210,000 + $40,000

March               $350,000                  $245,000 + $60,000 + $20,000

April                  $250,000                  $175,000 + $70,000 + $30,000

the total budgeted cash collections for April = ($250,000 x 70%) + ($350,000 x 20%) + ($300,000 x 10%) = $175,000 + $70,000 + $30,000 = $275,000