Question

Canine Supply Company’s budgeted sales for January, February, and March are $120,000, $160,000, and $140,000, respectively. Based on past experience, ABC expects that 25% of a month’s sales will be collected in the month of sale, 65% in the following month, and 9% in the second month following the sale. Budgeted cash receipts for the month of March would be

Answer 1

Answer:

$149,800

Explanation:

- 25% will be received the same month = 140000*0.25 = 35000.

- 65% will be received the following month = 160000*0.65 = 104000.

- 9% will be received the second month after = 120000*0.09 = 10800.

Hence total receipt will be = 35000+104000+10800 = 149800.

Hope this helps.

Good Luck.