Information pertaining to Brenton Corporation\'s sales revenue is presented in t
ID: 2447404 • Letter: I
Question
Information pertaining to Brenton Corporation's sales revenue is presented in the following table.
February March April
Cash Sales $160,000 $150,000 $120,000
Credit Sales 300,000 400,000 280,000
Total Sales $460,000 $550,000 $400,000
Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 60% are collected in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month are 70% of the next month's projected total sales. ll purchases of inventory are on account; 25% are paid in the month of purchase, and the remainder is paid in the month following the purchase.
Brenton's budgeted total cash receipts in April are
Explanation / Answer
The budgeted cash receipts for the month of April are as follows:
Particulars
Amount
Amount
Cash sales
120,000
Add:
From the month of April
280,000*60%
168,000
From the month of March
400,000*35%
140,000
Total collections
428,000
Particulars
Amount
Amount
Cash sales
120,000
Add:
From the month of April
280,000*60%
168,000
From the month of March
400,000*35%
140,000
Total collections
428,000