Question

Distribution Corporation collects 45​% of a​ month's sales in the month of​ sale, 40​% in the month following​ sale, and 15​% in the second month following sale. Budgeted sales for the upcoming four months​ are:

April budgeted sales $ 100,000
May budgeted sales $ 120,000
June budgeted sales $ 260,000
July budgeted sales $ 240,000

The amount of cash that will be collected in July is budgeted to be _______.

Answer 1

Answer:

The amount of cash that will be collected in July is budgeted to be $230,000

Explanation:

Cash received in July will be as follow

Receipt of May sales = 0  ( because all the sale receipts already been recovered )

Receipt of May sales = $18,000 ( 15% of May sales)

Receipt of June Sales = $104,000 ( 40% of June sales )

Receipt of July Sales = $108,000 ( 45% of July Sales )

Total receipt in July = $18,000 + $104,000 + $108,000 = $230,000

Schedule of Cash receipt for detailed working in is attached in MS Excel format with this answer please find it.