Parlee Company’s sales are 30% in cash and 70% on credit. Sixty percent of the credit sales are collected in the month of sale, 25% in the month following sale, and 12% in the second month following sale. The remainder are uncollectible. The following are budgeted sales data:
Total sales January $60,000, February $70,000, March $50,000, April $30,000.
Total cash receipts in April would be budgeted to be:
a. $38,900
b. $47,900
c. $27,230
Selected: d. $36,230 This answer is correct.
Correct! April cash sales are $30,000 at 30 percent is $9,000, April credit sales are $30,000 at 70 percent times 60 percent is $12,600, March credit sales are $50,000 at 70 percent times 25 percent is $8,750, February credit sales are $70,000 at 70 percent times 12 percent is $5,880. Total is $36,230.