Question

1. The BRS Corporation makes collections on sales according to the following schedule:

30% in month of sale

60% in month following sale

10% in second month following sale

The following sales have been budgeted:

	Sales
April	$	140,000
May	$	130,000
June	$	150,000

Budgeted cash collections in June would be:

A) $137,000

B) $85,000

C) $45,000

D) $123,000

Show solution

Answer 1

Answer = A i.e $137,000
Solution
STATEMENT OF BUDGET CASH COLLECTION
Particulars	APRIL	MAY	JUNE
Sale	$140,000	$130,000	$150,000
CASH COLLECTION -30 % in month of sale	$42000= (30% of $140000)	$39000=(30% of $130000)	$45000 =(30% of $150000)
CASH COLLECTION- 60 % in month following sale		$84000=(60% of $140000)	$78000 =(60% of $130000)
CASH COLLECTION -10 % in second month following sale			$14000 = (10% of $140000)
		Total in June	$137,000=($45000+$78000+$14000)

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