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27 June, 07:57

The ABC Corporation makes collections on sales according to the following schedule: 25% in month of sale 71% in month following sale 4% in second month following sale The following sales have been budgeted: Sales April $ 180,000 May $ 110,000 June $ 100,000 Budgeted cash collections in June would be:

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  1. 27 June, 09:30
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    Budgeted cash collection in June=$110,300

    Explanation:

    Budgeted cash collection in June will be determined as follows:

    Month of sale collection

    = 25%*June sales = 25% * 100,000 = 25,000

    Month following sales collection

    71% * May sales = 71% * 110,000 = 78,100

    Second month following sales collection

    4% * April Sales = 4% * 180,000 = 7200

    Budgeted cash collection in June = 25,000 + 78,100 + 7200 = 110,300

    Budgeted cash collection in June=$110,300
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