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Monroe Group is preparing its cash collections budget. Budgeted sales are $150,000 in July, $175,000 in...

Monroe Group is preparing its cash collections budget. Budgeted sales are $150,000 in July, $175,000 in August, and $200,000 in September. Fifty percent of sales are cash sales; the remainder is on account. Sales on account are expected to be collected 30% in the month of sale, 60% in the month following the month of sale, and 10% in the second month following the month of sale. How much are anticipated cash collections during the month of September?

  1. $190,000
  2. $180,000
  3. $130,000
  4. $100,000

Please explain and show all work.

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Answer #1
September
cash sales (200,000*50%)= 100,000
Credit sales
Sept (200,000*50%*30%) 30,000
aug   (175000*50%*60%) 52500
July   (150,000*50%*10%)= 7500
Total cash collection 190,000 answer
option a
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