Question

The ABC Corporation makes collections on sales according to the following schedule: 25% in month of sale 71% in month following sale 4% in second month following sale The following sales have been budgeted: Sales April $ 180,000 May $ 110,000 June $ 100,000 Budgeted cash collections in June would be:

Answer 1

Answer:

Budgeted cash collection in June=$110,300

Explanation:

Budgeted cash collection in June will be determined as follows:

Month of sale collection

= 25%×June sales = 25%× 100,000= 25,000

Month following sales collection

71%× May sales= 71% × 110,000 = 78,100

Second month following sales collection

4%× April Sales = 4%× 180,000= 7200

Budgeted cash collection in June=  25,000 + 78,100  + 7200 =110,300

Budgeted cash collection in June=$110,300