Question

Avril company makes collections on sales according to the following schedule: 30% in the month of sale 60% in the month following sale 8% in the second month following sale the following sales are expected: expected sales january $134,400 february $145,000 march $162,400 what should be the budgeted cash collections in march?

Answer 1

The budgeted cash collections for Avril Company in March are the sum of collections from January, February, and March sales based on the specified schedule, totaling $146,472.

Step-by-step explanation:

To calculate the budgeted cash collections for Avril Company in March, we need to consider the sales from January and February, as well as March, and apply the given collection schedule percentages to each of those months. The company collects 30% of sales in the month of the sale, 60% in the following month, and 8% in the second month following the sale.

For January sales ($134,400), we project 8% will be collected in March: $134,400 x 8% = $10,752.

For February sales ($145,000), we project 60% will be collected in March: $145,000 x 60% = $87,000.

Finally, for March sales ($162,400), we project 30% will be collected in the same month: $162,400 x 30% = $48,720.

To find the total budgeted collections for March, we sum these amounts: $10,752 (from January) + $87,000 (from February) + $48,720 (from March) = $146,472.