Question

In: Accounting

All of Pocast Corporation's sales are on account. Sixty percent of the credit sales are collected...

All of Pocast Corporation's sales are on account. Sixty percent of the credit sales are collected in the month of sale, 30% in the month following sale, and 10% in the second month following sale. The following are budgeted sales data for the company:

  January February March April
Total sales $ 700,000   $ 500,000   $ 400,000 $ 600,000
 

Cash receipts in April are expected to be:

$530,000

$410,000

$460,000

$360,000

Solutions

Expert Solution

Cash receipts in April=(60%*April sales)+(30%*March sales)+(0.1*February sales)

=(0.6*600,000)+(0.3*400,000)+(0.1*500,000)

which is equal to

=530,000.


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