Question

Singal Inc. is preparing its cash budget. It expects to have sales of $30,000 in January, $35,000 in February, and $20,000 in March. If 20% of sales are for cash, 40% are credit sales paid in the month after the sale, and another 40% are credit sales paid 2 months after the sale, what are the expected cash receipts for March? $27,600 $34,200 $30,000 $24,600 $28,200

Answer 1

Answer:

$30,000                                                                                        

Explanation:

The cash budget is a  projection (done by management) of the cash inflows and cash outflows expected for a given period of time.

It shows the expected movement in cash based on the expected sales and expenses.

Given that 20% of sales are for cash, 40% are credit sales paid in the month after the sale, and another 40% are credit sales paid 2 months after the sale, the expected cash receipts for March will include 20% of the sales in March, 40% of the sales in February and 40% of the sales in January.

= 20% * $20,000 + 40% * $35,000 + 40% * $30,000

= $4,000 + $14,000 + $12,000

= $30,000

Answer 2

Answer:

$30,000

Explanation:

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