Question

# Big City Manufacturing (BCM) is preparing its cash budget and expects to have sales of \$450,000...

Big City Manufacturing (BCM) is preparing its cash budget and expects to have sales of \$450,000 in January, \$375,000 in February, and \$555,000 in March. If 20% of the sales are for cash, 45% are credit sales paid in the month after the sale, and another 35% are credit sales paid 2 months after the sale, what are the expected cash receipts for March? Enter your answer rounded to two decimal places. Do not enter \$ or comma in the answer box. For example, if your answer is \$12,300.456 then enter as 12300.46 in the answer box.

Expected sales are as follow:

January = \$450000

February = \$375000

March = \$555000

20% of the sales are for cash, 45% are credit sales paid in the month after the sale, and another 35% are credit sales paid 2 months after the sale.

So, in the month of march, Cash receipt = 20% of March's sales + 45% of February's sales + 35% of January's sales

=> Expected cash receipt in march = 0.2*555000 + 0.45*375000 + 0.35*450000 = \$437250

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