Farm Supply Company's budgeted monthly sales are as follows: April $780,000, May $560,00 and June $900,000, Sales are 60% cash and 40% on account. Farm Supply collects all its accounts receivable in the month following the sale. Cost of goods sold is budgeted at 75% of sales and ending inventory is budgeted at 20% of the next month's cost of goods sold. All inventory purchases are paid 28% in the month of purchase and 72% in the following month. What are Farm Supply's budgeted cash collections for the month of May? O $336,000 O $414.000 O $648,000 O $747,000 O None of the above

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Farm Supply Company's budgeted monthly sales are as follows: April $780,000, May $560,000,
and June $900,000. Sales are 60% cash and 40% on account. Farm Supply collects all its
accounts receivable in the month following the sale. Cost of goods sold is budgeted at 75% of
sales and ending inventory is budgeted at 20% of the next month's cost of goods sold. All
inventory purchases are paid 28% in the month of purchase and 72% in the following month.
What are Farm Supply's budgeted cash collections for the month of May?
O $336,000
O $414,000
O $648,000
O $747,000
O None of the above
Transcribed Image Text:Farm Supply Company's budgeted monthly sales are as follows: April $780,000, May $560,000, and June $900,000. Sales are 60% cash and 40% on account. Farm Supply collects all its accounts receivable in the month following the sale. Cost of goods sold is budgeted at 75% of sales and ending inventory is budgeted at 20% of the next month's cost of goods sold. All inventory purchases are paid 28% in the month of purchase and 72% in the following month. What are Farm Supply's budgeted cash collections for the month of May? O $336,000 O $414,000 O $648,000 O $747,000 O None of the above
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