Question

Compute the Budgeted Cash Receipts for the Month. Given; Expected Sales Revenues for the month are $900,000, and 80% are Credit sales and 20% are cash sales. 50% of the credit sales will be collected in the month of the sale. Group of answer choices $540,000 $360,000 $450,000 $160,000 $810,000 none of these choices

Answer 1

To compute the Budgeted Cash Receipts for the month, calculate the credit sales amount and the cash sales amount. Multiply the credit sales by 50% to find the amount collected in the month of the sale. Add the cash sales and collected credit sales to get the Budgeted Cash Receipts for the month, which is $540,000.

Step-by-step explanation:

To compute the Budgeted Cash Receipts for the month, we need to consider the expected sales revenues and the percentage of credit sales and cash sales.

Given that the expected sales revenues for the month are $900,000 and 80% are credit sales, the credit sales amount would be $900,000 * 0.8 = $720,000.

Out of the credit sales, 50% would be collected in the month of the sale, so the amount collected would be $720,000 * 0.5 = $360,000.

Since 20% of the sales are cash sales, the cash sales amount would be $900,000 * 0.2 = $180,000.

Therefore, the Budgeted Cash Receipts for the month would be $360,000 + $180,000 = $540,000.