Question

Mapleview Inc. has the following budgeted sales:

July $200,000
August $300,000
September $250,000.
Forty percent of the sales are for cash, and 60 percent are on credit. For the credit sales, 50 percent are collected in the month of sale and 50 percent the next month. The total expected cash receipts during September are:_______.
A) $265,000
B) $262,500
C) $250,000
D) $280,000

Answer 1

Total cash= $265,000

Step-by-step explanation:

Giving the following information:

Sales:

July $200,000

August $300,000

September $250,000.

40% of the sales are for cash, and 60 percent are on credit. For the credit sales, 50 percent are collected in the month of sale and 50 percent the next month.

We need to determine the cash collection for September:

Cash collection:

Sales in cash September= 250,000*0.4= 100,000

Sales on account September= (250,000*0.6)*0.5= 75,000

Sales on account August= (300,000*0.6)*.5= 90,000

Total cash= $265,000