Question
The LaGrange Corporation had the following budgeted sales for the first half of the current year: Cash Sales Credit Sales January $70,000 $170,000 February $75,000
The LaGrange Corporation had the following budgeted sales for the first half of the current year:
| Cash Sales | Credit Sales | |
|---|---|---|
| January | $70,000 | $170,000 |
| February | $75,000 | $190,000 |
| March | $45,000 | $150,000 |
| April | $40,000 | $125,000 |
| May | $50,000 | $220,000 |
| June | $100,000 | $190,000 |
The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:
Collections on sales:
45% in month of sale
40% in month following sale
15% in second month following sale
The accounts receivable balance on January 1 of the current year was $69,000, of which $44,000 represents uncollected December sales and $25,000 represents uncollected November sales.
The total cash collected during January by LaGrange Corporation would be:
Multiple Choice
-
$301,000
-
$251,000
-
$80,000
-
$203,500
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Managerial Accounting
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
12th Edition
978-0073526706, 9780073526706
