All of Pocast Corporation's sales are on account. Sixty percent of the credit sales are collected in the month of sale, 30% in the month following sale, and 10% in the second month following sale. The following are budgeted sales data for the company: January February March AprilTotal sales $700,000 $500,000 $400,000 $600,000Cash receipts in April are expected to be:a. $530,000b. $410,000c. $460,000d. $360,000

Option (a) $530,000

Explanation:

Data provided in the question:

Sales collected in the month of sale = 60% of the credit sales

Sales collected in the following month = 30%

Sales collected in the second month = 10%

Month January February March April

Total sales $700,000 $500,000 $400,000 $600,000

Now,

Cash receipts in April

= (60% of April sales) + (30% of March sales) + (10% of February sales)

= (0.6 * $600,000) + (0.3 * $400,000) + (0.1 * $500,000)

= $360,000 + $120,000 + $50,000

= $530,000

hence,

Option (a) $530,000