A company is formulating its plans for the coming year, including the preparation of its cash budget. Historically, the company's sales are 20% cash. The remaining sales are on credit with the following collection pattern:
|
Collections on Account
|
Percentage
|
|
In the month of sale
|
38%
|
|
In the month following the sale
|
60%
|
|
Uncollectible
|
2%
|
Sales for the first 5 months of the coming year are forecast as follows:
|
January
|
$ 3,498,000
|
|
February
|
3,798,000
|
|
March
|
3,598,000
|
|
April
|
3,998,000
|
|
May
|
4,198,000
|
|
For the month of April, the total cash receipts from sales and collections on account would be:
|
$3,742,032.
$4,477,640.
$4,685,440.
$3,534,232