The following sales budget has been prepared: Month Cash Sales Credit Sales Janu
ID: 2445866 • Letter: T
Question
The following sales budget has been prepared:
Month
Cash Sales
Credit Sales
January
$20,000
$40,000
February
$40,000
$60,000
March
$60,000
$80,000
April
$80,000
$100,000
Collections are 50% a month of sale, 40% a month following the sale, and 5% two months following a sale. The remaining 5% is anticipated to be uncollectible.
1. What will the total cash collection be for the month of March?
A) $140,000
B) $126,000
C) $80,000
D) $66,000
2. What will the total cash collection be for the month of April?
A) $180,000
B) $100,000
C) $165,000
D) $ 85,000
Month
Cash Sales
Credit Sales
January
$20,000
$40,000
February
$40,000
$60,000
March
$60,000
$80,000
April
$80,000
$100,000
Explanation / Answer
Total Cash collection for the month of march Particulars Amount 5% Received of January 2000 40% Received of February 24000 50% Received of March 40000 Total cash collection for the month of march 66000 Total Cash collection for the month of april Particulars Amount 5% Received of February 3000 40% Received of March 32000 50% Received of April 50000 Total cash collection for the month of april 85000