Question

# Budgeted sales at Ikkeep Corporation over the next four months are given below: September \$150,000 October...

Budgeted sales at Ikkeep Corporation over the next four months are given below:

 September \$150,000 October \$160,000 November \$180,000 December \$140,000

The company estimates that 25% of the sales are for cash, and 75% on credit. Collections for sales on account follow a stable pattern as follows:

50% will be collected in the month of the sale, 30% in the month following the sale, 15% in the second month following the sale, and the rest uncollectible. What would be the expected cash receipts for December?

 1) \$94,500
 2) \$146,000
 3) \$361,000
 4) \$197,000

#### Homework Answers

Answer #1

For december, the receipts = 50% of current credit sales + 30% of november credit sales + 15% of oct credit sales

first step credit sales and cash sales are calculated using the given percentages.

second step create a budget as follows for break up of receipts

If you have any doubts leave a comment and let me know

Know the answer?
Your Answer:

#### Post as a guest

Your Name:

What's your source?

#### Earn Coins

Coins can be redeemed for fabulous gifts.

##### Not the answer you're looking for?
Ask your own homework help question
ADVERTISEMENT
##### Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

ADVERTISEMENT