Question

Big Wheel, Inc. collects 25% of its sales on account in the month of the sale and 75% in the month following the sale. Sales on account are budgeted to be $16,300 for March and $32,600 for April. What are the budgeted cash receipts from sales on account for April

Answer 1

Total cash collection= $20,375

Step-by-step explanation:

Giving the following information:

Big Wheel, Inc. collects 25% of its sales on account in the month of the sale and 75% in the month following the sale.

Sales:

March= $16,300

April= $32,600

Cash collection April:

Sales on account from April= 32,600*0.25= 8,150

Sales on account from March= 16,300*0.75= 12,225

Total cash collection= $20,375