Question

Answer the following questions (#21 and #22) using the information below: Monetary Company has the following...

Answer the following questions (#21 and #22) using the information below:

Monetary Company has the following sales budget for the last six months of 2014:

      July              $400,000                  October        $360,000

      August            320,000                  November      400,000

      September      440,000                  December       376,000

Historically, the cash collection of sales has been as follows:

      65% of sales collected in the month of sale,

      25% of sales collected in the month following the sale,

      8% of sales collected in the second month following the sale, and

      2% of sales are uncollectible.

Cash collections for September are:

  • A.

    $398,000

  • B.

    $408,000

  • C.

    $346,800

  • D.

    $286,000

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