Dymund Group reports the sale of 16,000 units for $22 per unit in the current quarter. 70% of these sales are credit sales. Management forecasts a 6% growth in sales each quarter, and according to their records, the company is expecting to receive full payment for credit sales in the next quarter. If the selling price and the credit sale ratio remain the same, then cash receipts for the next quarter are expected to be

Question

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Budgeted Cash Receipts = Budgeted Cash Sales + Budgeted Collections on Credit Sales; Budgeted Sales in the Next Quarter = (16,000 × (1 + 6%) × $22) = $373,120; Budgeted Cash Sales in the Next Quarter = $373,120 × 30% = $111,936; Budgeted Credit Collection (of previous quarter) = 16,000 × $22 × 70% = $246,400; Budgeted Cash Receipts = $111,936 + $246,400 = $358,336.

Dymund Group Reports the Sale of 16,000 Units for $22