In: Accounting
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.
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 | ||||