Question

Avril Company makes collections on sales according to the following schedule: 30% in the month of sale 66% in the month following sale 4% in the second month following sale The following sales have been are expected: Expected Sales January$130,000 February$150,000 March$140,000 Budgeted cash collections in March should be budgeted to be:

Answer 1

Answer:

Budgeted cash collections for March are $146200

Explanation:

Following the terms of the collection schedule, the budgeted cash collections for the month of March is expected to be as follows,

4% amount of January sales that is 0.04 * 130000 = $5200

66% amount of February's sales that is 0.66 * 150000 = $99000

30% amount of March's sales that is 0.3 * 140000 = $42000

Thus, the total budgeted cash collection for March will be,

Budgeted cash collection-March =  5200 + 99000 + 42000

Budgeted cash collections- March = 146200