Question

The BRS Corporation makes collections on sales according to the following schedule:



25% in month of sale
71% in month following sale
4% in second month following sale


The following sales have been budgeted:



Sales
April $ 180,000
May $ 110,000
June $ 100,000


Budgeted cash collections in June would be

Answer 1

Answer:

$110,300

Explanation:

June collections will comprise of

25% of June sales

71% of May sales

4% of April sales

25% of June sales

=25/100 x 100,000

=$25,000

71% of may sales

=71/100 x $110,00

=$78,100

4% of April sales

=4/100 x $180,000

=$7,200

Total June collections

=$25,000 + $78,100 +$7,200

=$110,300