Question

The WRT Corporation makes collections on sales according to the following schedule:

45% in month of sale

50% in month following sale

5% in second month following sale

The following sales have been are expected:

Expected Sales

April $160,000   

May $180,000   

June $170,000   

Budgeted cash collections in June should be budgeted to be:

A;$170,000

B;$166,500

C;$170,800

D:$174,500

Answer 1

Collection:
45% in Month of Sales
50% in Month following Sales
5% in Second Month following Sales
	April	May	June
Expected Sales	160000	180000	170000
Budgeted Cash Collections in June:	Amount	Explanation
April Month Sales-5% of April Month Sales	8000	(5% of 160000)
May Month Sales-50% of May month Sales	90000	(50% of 180000)
June Month Sales-45% of June Month Sales	76500	(45% of 170000)
Total	174500
Answer is 174500(D)