206k views
3 votes
ABC Company began operations on January 1, 2018. It makes all sales on account and expects the following collection pattern: 30% are collected in the month of the sale; 60% are collected in the first month after the sale and 10% are collected in the second month after the sale. Of budgeted sales for January, February, and March were $20,000, $60,000, and $70,000, respectively, what were the firm's budgeted collections for March

1 Answer

4 votes

Answer:

The firm's budgeted collections for March is $64,000

Step-by-step explanation:

For collecting the firm's budgeted collections for march, the computation is shown below:

30% are collected in the month of the sale :

= 30% of March sale

= 30 × $70,000

= $21,000

60% are collected in the first month after the sale :

It means the calculations based on February month

= 60% × $60,000

=$36,000

10% are collected in the second month after the sale:

It means the calculations based on January month

= 10% × $70,000

= $7,000

Now, add these three month sales which equals to

= $21,000 + $36,000 + $7,000

= $64,000

Hence, the firm's budgeted collections for March is $64,000

User Mdd
by
8.0k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories