Question

The following credit sales are budgeted by Swifty Corporation:

January $304000 February 400000 March 520000 April 460000

The company's past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale. The anticipated cash inflow for the month of April is _______.

Answer 1

$458,000

Explanation:

April

$460,000 x .70 = $322,000

March

$520,000 x .2 = $104,000

February

$400,000 x .08 = $32,000

Addition of APRIL+MARCH+FEBRUARY

$322,000 + $104,000 + $32,000

= $458,000

Therefore the anticipated cash inflow for the month of April is $458,000