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Question(s) / Instruction(s):

A company is formulating its plans for the coming year, including the preparation of its cash budget. Historically, the company's sales are 30% cash. The remaining sales are on credit with the following collection pattern:

Collection on Account                                    Percentage

     In the month of sale                                  40%

     In the month following the sale            58%

     Uncollectible                                                 2%

Sales for the first 5 months of the coming year are forecast as follows:

January                                $3,500,000

February                              3,800,000

March                                   3,600,000

April                                       4,000,000

May                                       4,200,000

For the month of April, the total cash receipts from sales and collections on account would be (CIA adapted)

a)            $3,729,968

b)            $3,781,600

c)            $4,025,200

d)            $4,408,000

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