Question

The BRS Corporation makes collections on sales according to the following schedule: 45% in month of sale 50% in month following sale 5% in second month following sale The following sales have been budgeted: Sales April$160,000 May$180,000 June$170,000 Budgeted cash collections in June would be:

Answer 1

$174,500.

Step-by-step explanation:

Budgeted sale in June would made up of the collections:

Month of sale collection

45% × June = 45% × 170,000 = 76500

Month following sale

50% × May sales = 50% × 180,000 = 90000

Second month following sales

= 5% × April sales = 5% × 160,000 = 8000

Budgeted cash collection for June

= 76,500 +90,000 +8,000

= $174,500.