Question

Big Wheel, Inc. collects 25% of its sales on account in the month of the sale and 75% in the month following the sale. Sales on account are budgeted to be $17,900 for March and $50,600 for April. What are the budgeted cash receipts from sales on account for April

Answer 1

$26,075

Step-by-step explanation:

Follow the Receipt Cycle that has been stated but this time focusing on the month of April

Receipts :

Collection for April Sales ( $50,600 × 25%) = $12,650

Collection for March Sales ( $17,900 × 75%) = $13,425

Total Collection in April = $26,075

Therefore, Total cash receipts from sales on account for April are $26,075.