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The BRS Corporation makes collections on sales according to the following schedule: 30% in month of...

The BRS Corporation makes collections on sales according to the following schedule: 30% in month of sale 64% in month following sale 6% in second month following sale The following sales have been budgeted:

Sales April $ 100,000 May $ 110,000 June $ 100,000

Budgeted cash collections in June would be:

Multiple Choice

$100,600

$106,400

$100,400

$100,000

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Answer #1

Budgeted cash collections in June =

6% of sales of April Month + 64% of sales of May month + 30% sales of June month

Sales for April Month = $100000

6% of sales of April Month = $100000 × 6%

= $6000

Sales for May Month = $110000

64% of sales of May month = $110000 × 64%

= $70400

Sales for June month= $100000

30% sales of June month = $100000 × 30%

= $30000

Budgeted cash collections in June =

$6000 + $70400 + $30000

= $106400

Therefore, the correct answer is option 2nd, $106400.

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