The following sales budget has been prepared: $\begin{array}{lrr}
\text { Month } & \text { Cash Sales } & \text { Credit Sales } \
\hline \text { September } & \$ 123,000 & \$ 210,000 \
\text { October } & 140,000 & 180,000 \
\text { November } & 167,000 & 260,000 \
\text { December } & 189,000 & 190,000
\end{array}$ Collections are 50% in the month of sale, 40% in the month following the sale, and 10% two months following the sale.No uncollectible accounts are anticipated._____ is the estimated cash collection in October from October sales
A)$230,000
B)$125,000
C)$310,000
D)None of these answers is correct

Question

Quizplus · Accepted Answer

October cash sales are $140,000. 50% of this amount, or $70,000, will be collected in October. 40% of the $140,000, or $56,000, will be collected in November. Therefore, the estimated cash collection in October from October sales is $70,000 + $56,000 = $126,000.

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