Benjamin Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $250,000, $300,000, and $420,000, respectively, for September, October, and November. The company expects to sell 20 percent of its merchandise for cash. Of sales on account, 70 percent are expected to be collected in the month of the sale, 25 percent in the month following the sale, and the remainder in the following month. The cash collections from accounts receivable in September are

Question

Business

Lillian Castillo

Today, 04:43

Benjamin Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $250,000, $300,000, and $420,000, respectively, for September, October, and November. The company expects to sell 20 percent of its merchandise for cash. Of sales on account, 70 percent are expected to be collected in the month of the sale, 25 percent in the month following the sale, and the remainder in the following month. The cash collections from accounts receivable in September are

+2

Answers (1)

Know the Answer?

Santiago Everett · Answer 1

September = $140,000

Explanation:

Giving the following information:

Budgeted sales;

September = $250,000

The company expects to sell 20 percent of its merchandise for cash. Of sales on account, 70 percent are expected to be collected in the month of the sale, 25 percent in the month following the sale, and the remainder in the following month.

Sales on account September:

Sales on account = (250,000*0.8) = $200,000

Cash collection from sales on account:

September = 200,000*0.7 = $140,000

Because it is the beginning of operations, there aren't cash collections from previous months