Question

Gallonte Inc. began operations in April of this year. It makes all sales on account, subject to the following collection pattern: 30% are collected in the month of sale; 60% are collected in the first month after sale; and 10% are collected in the second month after sale. If sales for April, May, and June were $60,000, $80,000, and $70,000, respectively, what were the firm's budgeted collections for the quarter?

a. $140,000.
b. $121,000.
c. $153,000.
d. $175,000.
e. None of the answers is correct

Answer 1

C. $153,000

Step-by-step explanation:

The table below explains the collection every month:

Description April May June July August

Sale $60,000 $80,000 $70,000

Collection $18,000 $36,000 $6,000

$24,000 $48,000 $8,000

$21,000 $42,000 $7,000

Total

collection $18,000 $60,000 $75,000 $50,000 $7,000

Total collection of the quarter $153,000