Question

JustDoIt Corporation collects 35% of a month's sales in the month of sale, 45% in the month following sale, and 20% in the second month following sale. Budgeted sales for the upcoming four months are:
April budgeted sales 120,000
May budgeted sales $150,000
June budgeted sales $230,000
July budgeted sales $170,000
The amount of cash that will be collected in July is budgeted to be:______.
a. $193,000.
b. $59,500.
c. $133,500.
d. $190,000.

Answer 1

Answer:

Option a= $193,000.

Explanation:

So, we are given the following parameters in the question above; 35% of a month's sales in the month of sale, 45% in the month following sale, and 20% in the second month following sale. For the next four months, the Budgeted sales are; April budgeted sales= 120,000, May budgeted sales = $150,00, June budgeted sales = $230,000 and July budgeted sales = $170,000.

Therefore, The amount of cash that will be collected in July is budgeted to be:

(35% × 170,000) + (45% × 230,000) + (20% × 150,000).

= $193,000.

Answer 2

Answer:

The correct answer is option a ($193,000)

Explanation:

Solution

From the given question, we take the following steps below.

For the month of July. we calculate the following as follows:

Cash collections:

For May sales ($150000 x 20%) 30000

For June sales ($230000 x 45%) 103500

For July sales ($170000 x 35%) 59500

Now,

Total cash collection in July $ is 193000