Question

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: Multiple Choice $175,000 $275,000 $70,000 $30,000

Answer 1

Total budgeted cash collections in April =(70%*April)+(20%*March)+(10%*February)

which is equal to

=(0.7*250,000)+(0.2*350,000)+(0.1*300,000)

=$275000.