Question

In: Accounting

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.

Solutions

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

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