Question

Woodpecker Co. has $299,000 in accounts receivable on January 1. Budgeted sales for January are $939,000 Woodpecker Co. expects to sell 20% of its merchandise for cash. Of the remaining 80% of sales on account, 75% are expected to be collected in the month of sale and the remainder the following month. The January cash collections from sales are Oa, $840,160 b. $1,349,200 OC. $630,120 d. $1,050,200

Answer 1

D. $1,050,200

Step-by-step explanation:

The January cash collections from sales are

Total Budgeted sales for January are $939,000

Cash sales = $939,000 x 0.20 = $187,800

Cash from customers for January sales = $939,000 x 0.80 x 0.75 = $563,400

Cash from december sales = $299,000

Total January cash collections from sales are = $187,800 + $563,400 + $299,000 = $1,050,200