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24 October, 15:30

Seventy percent of Pitkin Corporation's sales are collected in the month of sale, 20% 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 Budgeted sales $200,000 $300,000 $350,000 $250,000 Total budgeted cash collections in April would be:

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  1. 24 October, 19:27
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    Total = $275,000

    Explanation:

    Giving the following information:

    70% of sales are collected in the month of sale

    20% in the month following sale

    10% in the second month following sale.

    Budgeted sales dа ta:

    February = $300,000

    March = $350,000

    April = $250,000

    The cash collection of any given month is comprised of cash from the two months before.

    Cashe collection:

    From February = 300,000*0.1 = 30,000

    From March = 350,000*0.2 = 70,000

    From April = 250,000*0.7 = 175,000

    Total = $275,000
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