Question

Chocolate Co. reports the following information from its sales budget: ​ Expected sales:

July $ 90,000 ​
August 104,000 ​
September 120,000 ​ ​
Cash sales are normally 25% of total sales and all credit sales are expected to be collected in the month following the date of sale. The total amount of cash expected to be received from customers in September is:

A. $ 78,000
B. $ 108,000
C. $ 120,000
D. $ 130,500

Answer 1

The total amount of cash expected to be received from customers in September is: B. $ 108,000

Step-by-step explanation:

The total amount of cash expected to be received from customers in September include the following :

1. Cash Sales in the month of September - 25 %
2. Cash Receipts from Accounts for August Sales - 75 %

The Calculation of cash expected to be received from customers in September is as follows :

Cash Sales - September = 120,000 × 25% = 30,000

Credit Sales - August = 104,000 × 75% = 78,000

Total = 108,000