Question

Wallace Publishers Inc. collects 55% of its sales on account in the month of the sale and 45% in the month following the sale.

If sales on account are budgeted to be $385,000 for April and $466,000 for May, what are the budgeted cash receipts from sales on account for May?

Answer 1

Answer:

Budgeted cash receipts from sales on account for may                       = 45% of April Sales   (+) 55% of May Sales                       = (45% x $385,000) + (55% x $466,000)                       =   $173,250 + $256,300                       =    $429,550

Budgeted cash receipts from sales on account for may = $429,550