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Assume a company is preparing a budget for its first two months of operations. During the first and second months it expects cash sales of $24,000 and $40,500, respectively. It also expects credit sales of $ 50,500 and $60, 500, respectively. The company expects to collect 30% of its credit sales in the month of the sale, 60% in the following month, and 10% is deemed uncollectible. What amount of cash collections would appear in the company's cash budget for the first month?Multiple Choice$39, 150$ 15,150$55,650$40,500

Assume a company is preparing a budget for its first two months of operations. During the first and second months it expects cash sales of $24,000 and $40,500, respectively. It also expects credit sales of $ 50,500 and $60, 500, respectively. The company expects to collect 30% of its credit sales in the month of the sale, 60% in the following month, and 10% is deemed uncollectible. What amount of cash collections would appear in the company's cash budget for the first month?Multiple Choice$39, 150$ 15,150$55,650$40,500

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume a company is preparing a budget for its first two months of operations. During the first and second months it expects cash sales of $24,000 and $40,500, respectively. It also expects credit sales of $ 50,500 and $60, 500, respectively. The company expects to collect 30% of its credit sales in the month of the sale, 60% in the following month, and 10% is deemed uncollectible. What amount of cash collections would appear in the company's cash budget for the first month?Multiple Choice$39, 150$ 15,150$55,650$40,500
Transcribed Image Text:Assume a company is preparing a budget for its first two months of operations. During the first and second months it expects cash sales of $24,000 and $40,500, respectively. It also expects credit sales of $ 50,500 and $60, 500, respectively. The company expects to collect 30% of its credit sales in the month of the sale, 60% in the following month, and 10% is deemed uncollectible. What amount of cash collections would appear in the company's cash budget for the first month?Multiple Choice$39, 150$ 15,150$55,650$40,500
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