Question

Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $250,000, $320,000, and $410,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale, 30% in the month following the sale.

The cash collections in October are:

$320,000

$248,000

$304,250

$382,500

Answer 1

Answer:

The correct answer is C.

Explanation:

Giving the following information:

Budgeted sales for the first three months of business are $250,000, $320,000, and $410,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale, 30% in the month following the sale.

Cash collection:

Cash= 320,000*0,25= 80,000

Account= (320,000*0.75)*0.7= 168,000

From September= (250,000*0.75)*0.3= 56,250

Total= $304,250