Question

The BRS Corporation makes collections on sales according to the following schedule: 30% in month of sale 60% in month following sale 10% in second month following sale The following sales have been budgeted: Sales April $ 140,000 May $ 130,000 June $ 150,000 Budgeted cash collections in June would be:

$137,000
$85,000
$45,000
$123,000

Answer 1

Answer:

Cash Collections for June =$137000

Explanation:

The cash collections are on the basis of month of sale and months following sale. So, the 10% of April sale will be collected in June as it is the second month following April's sale.

The 60% of May's sales will be collected in June as it is the month following May's sales while cash for the 30% of the sales made in June will be collected in June.

• Cash Collection in June = 0.1 * 140000 + 0.6 * 130000 + 0.3 * 150000 = $137000