Question

Distribution 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:
The amount of cash that will be collected in July is budgeted to be
A. $66.500
B. $183,000
C. $171,000
D. $116, 500

Answer 1

Answer:

B. $183,000

Explanation:

Calculation to determine The amount of cash that will be collected in July is budgeted to be

Budgeted collection in July = July sales (190,000*35%) + June sales (210,000*45%) + May sales (110,000*20%)

Budgeted collection in July =$66,500 +$94,500 + $22,000

Budgeted collection in July=$183,000

Therefore The amount of cash that will be collected in July is budgeted to be $183,000