The following credit sales are budgeted by Blossom Company. January 200600 February 295000 March 413000 The...

The following credit sales are budgeted by Blossom Company.

January		200600
February		295000
March		413000

The company’s past experience indicates that 60% of the accounts receivable are collected in the month of sale, 40% in the month following the sale. The anticipated cash inflow for the month of March is

$247800.

$365800.

$413000.

$401200.

Expert Solution

Solution:

	CALCULATION OF EXPECTED COLLECTION IN THE MONTH OF MARCH

	PARTICULARS	January	February	March
	Sales On Account	$ 2,00,600	$ 2,95,000	$ 4,13,000

	60% Expected to collect in the same month	$ 1,20,360	$ 1,77,000	$ 2,47,800

	40% in the month following the sale		$ 80,240	$ 1,18,000


	Total	$ 1,20,360	$ 2,57,240	$ 3,65,800


	Answer = Option 2 = $ 365,800

ekkarill92 answered 2 years ago

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