Question

On October 1 of the current year, Molloy Corporation prepared a cash budget for October, November, and December. All of Molloy's sales are made on account. The following information was used in preparing estimated cash collections:

August sales (actual)	$	47,000
September sales (actual)	$	57,000
October sales (estimated)	$	27,000
November sales (estimated)	$	77,000
December sales (estimated)	$	67,000

Approximately 65% of all sales are collected in the month of the sale, 20% is collected in the following month, and 15% is collected in the month thereafter.

Budgeted collections from customers in November total:

Multiple Choice

• $65,500.

• $64,000.

• $161,000.

• $55,450.

Answer 1

	November
Collection from November sales (77000*65%)	$50050
Collection from October Sales (27000*20%)	5400
Collection from September Sales (57000*15%)	8550
Budgeted collection from customer in November	$64000