Browning Company's sales budget shows the following expected total sales:MonthSales$22,000January$33,000February$38,000$43,000MarchAprilThe company expects 70% of its sales to be on account (credit sales). Credit sales are collected as follows: 25% in the month of sale, 72% in the month following the sale with the remainder being uncollectible and written off. The total cash inflows from sales in April would be:Multiple Choice$27,915$22,575$39,577$24,200

Answered: Browning Company's sales budget shows…

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 $32,500 and $48,500, respectively. It also expects credit sales of $58,500 and $68,500, respectively. The company expects to collect 30% of its credit sales in the month of the sale, 65% in the following month, and 5% is deemed uncollectible. What amount of cash collections would appear in the company’s cash budget for the first month? Multiple Choice $50,050 $17,550 $66,050 $48,500
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