Question

Waterway Industries reported the following information for 2016: October November December Budgeted sales $490000 $370000 $470000 Budgeted purchases $340000 $186000 $218000 All sales are on credit. Customer amounts on account are collected 50% in the month of sale and 50% in the following month. Cost of goods sold is 35% of sales. Waterway purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month. Accounts payable is used only for inventory acquisitions. How much cash will Waterway receive during November?

Answer 1

Answer:

$430,000

Explanation:

Cash Waterway will receive during November = (Budgeted Sales October*50%) + (Budgeted Sales November*50%)

Cash Waterway will receive during November = ($490,000*50%) +($370,000*50%)

Cash Waterway will receive during November = $245,000 + $185,000

Cash Waterway will receive during November = $430,000