Question

Big Wheel, Inc. collects 25% of its sales on account in the month of the sale and 75% in the month following the sale. Sales on account are budgeted to be $21,600 for March and $70,700 for April. What are the budgeted cash receipts from sales on account for April

Answer 1

Answer:

Total cash collection April= $33,875

Explanation:

Giving the following information:

Collects 25% of its sales on account in the month of the sale and 75% in the month following the sale.

Sales on account:

Marc=$21,600

April= $70,700

Cash collection April:

Sales in account from March= (21,600*0.75)= 16,200

Sales in account from April= (70,700*0.25)= 17,675

Total cash collection April= $33,875