Woodpecker Co. has $293,000 in accounts receivable on January 1.Budgeted sales for January are $977,000. Woodpecker Co. expects to sell20% of its merchandise for cash. Of the remaining 80% of sales onaccount, 75% are expected to be collected in the month of sale and theremainder the following month. The January cash collections from salesarea. $644,760Ob. $1,367,600Oc. $859,680Od. $1,074,600

Budget: A budget is an estimation to determine the income that will be earned and expenses that will…

Answered: remainder the following month. The…

remainder the following month. The January cash collections from sales are a. $644,760 Ob. $1,367,600 Oc. $859,680 Od. $1,074,600

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 17E

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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

Woodpecker Co. has $293,000 in accounts receivable on January 1.
Budgeted sales for January are $977,000. Woodpecker Co. expects to sell
20% of its merchandise for cash. Of the remaining 80% of sales on
account, 75% are expected to be collected in the month of sale and the
remainder the following month. The January cash collections from sales
are
a. $644,760
Ob. $1,367,600
Oc. $859,680
Od. $1,074,600

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