Question

Seventy percent of Parlee Corporation's sales are collected in the month of sale, 25% in the month following sale, and 5% in the second month following sale. The following are budgeted sales data for the company:

Jan Feb Mar Apr
Total Sales $600,000 $700,000 $500,000 $300,000
Total Budgeted cash collections in April would be:________.
a. $125,000.
b. $210,000.
c. $370,000.
d. $35,000.

Answer 1

C) $370,000

Step-by-step explanation:

sales expressed in thousands of $

Month total sales collected in collected in collected

current m. 70% next m. 25% 2 m. 5%

Jan. 600 420

Feb. 700 490 150

Mar. 500 350 175 30

Apr. 300 210 125 35

May 75 25

June 15

total cash collection in April = $210,000 + $125,000 + $35,000 = $370,000