Question

question content area big wheel, inc., collects 25% of its sales on account in the month of the sale and 75% in the month following the sale. sales on account are budgeted to be $20,000 for march and $75,900 for april. what are the budgeted cash receipts from sales on account for april?

Answer 1

The budgeted cash receipts from sales on account for April is the sum of 75% of March's sales and 25% of April's sales, which equals $33,975.

Step-by-step explanation:

The student is asking about the budgeted cash receipts from sales on account for the month of April. To calculate this, we need to consider 25% of April's sales and 75% of March's sales, since the company collects 25% in the month of the sale and 75% in the following month.

For March, the sales on account are $20,000. Therefore, 75% collected in April would be $20,000 × 75% = $15,000.

For April, the sales on account are $75,900. Thus, 25% collected in April would be $75,900 × 25% = $18,975.

The total budgeted cash receipts from sales on account for April would therefore be the sum of March's and April's collections: $15,000 + $18,975 = $33,975.