Question

All of Porter Corporation's sales are on account. Sixty percent of the credit sales are collected in the month of sale, 25% in the month following sale, and 10% in the second month following sale. The remainder are uncollectible. The following are budgeted sales data for the company:

January - February - March - April - Total sales
$400,000 - $600,000 - $500,000 - $700,000
Cash receipts in April are expected to be:

Answer 1

The Cash receipts in April are expected to be $620,000.

Step-by-step explanation:

From credit sales of February (600,000*25%) 150,000

From credit sales of March (500,000*10%) 50,000

From credit sales of April (700,000*60%) 420,000

Cash receipts in April $620,000

Therefore, The Cash receipts in April are expected to be $620,000.