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
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 | $ | 49,000 | $ | 150,000 |
| April | $ | 44,000 | $ | 129,000 |
| May | $ | 54,000 | $ | 220,000 |
| June | $ | 100,000 | $ | 230,000 |
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:
40% in month of sale
30% in month following sale
30% in second month following sale
The accounts receivable balance on January 1 of the current year was $77,000, of which $48,000 represents uncollected December sales and $29,000 represents uncollected November sales.
The total cash collected during January by LaGrange Corporation would be
Multiple Choice:
-
$301,000
-
$255,000
-
$80,000
-
$191,000
NOTE- Please show how you reached your answer! Thank you in advance!
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