Question

# The LaGrange Corporation had the following budgeted sales for the first half of the current year:...

The LaGrange Corporation had the following budgeted sales for the first half of the current year:

 Cash Sales Credit Sales January \$ 70,000 \$ 170,000 February \$ 75,000 \$ 190,000 March \$ 49,000 \$ 150,000 April \$ 44,000 \$ 129,000 May \$ 54,000 \$ 220,000 June \$ 100,000 \$ 230,000

The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:

Collections on sales:

40% in month of sale

30% in month following sale

30% in second month following sale

The accounts receivable balance on January 1 of the current year was \$77,000, of which \$48,000 represents uncollected December sales and \$29,000 represents uncollected November sales.

The total cash collected during January by LaGrange Corporation would be

Multiple Choice:

• \$301,000

• \$255,000

• \$80,000

• \$191,000

NOTE- Please show how you reached your answer! Thank you in advance!

#### Homework Answers

Answer #1
 Answer The Correct Option is D : \$ 191,000 Explanation Cash sales \$        70,000 Credit sales: Collection from November sales \$        29,000 Collection from December sales \$        24,000 48000/60%*30% Collection from January sales \$        68,000 170000*40% Total cash collected during January \$      191,000
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