Question

Trumbull Company budgeted sales on account of $120,000 for July, $211,000 for August, and $198,000 for September. Collection experience indicates that 60% of the budgeted sales will be collected the month after the sale, 36% will be collected the second month, and 4% will be uncollectible. The cash receipts from accounts receivable that should be budgeted for September would be

Answer 1

Total cash receipts 194,760

Step-by-step explanation:

We will calculate base on the budget number provided.

We will multiply the month sales revenue by the amount expected to be colelcted on september

The receipts from account receivable on september:

60% of previous month:

60% of August: 198,000 = 118,800

36% from the second month:

36% of July: 211,000 = 75,960

Total cash receipts 194,760