Question
Information pertaining to Brenton Corporation's sales revenue is presented in the following table: February March April Cash Sales $160,000 $150,000 $120,000 Credit Sales 300,000 400,000
Information pertaining to Brenton Corporation's sales revenue is presented in the following table:
February | March | April | |
---|---|---|---|
Cash Sales | $160,000 | $150,000 | $120,000 |
Credit Sales | 300,000 | 400,000 | 280,000 |
Total Sales | $460,000 | $550,000 | 400,000 |
Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 75% are collected in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month is 80% of the next month's projected total sales. All purchases of inventory are on account; 50% are paid in the month of purchase, and the remainder is paid in the month following the purchase. Brenton's budgeted total cash payments in March for inventory purchases are
$385,000. |
$505,000. |
$306,250. |
$280,000. |
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