Miso Company makes all its sales on account. Accounts receivable payment experience is as follows:
Miso provided information on sales as follows:
$\begin{array}{lr}
\text { Percent paid in the month of sale } & 30 \% \
\text { Percent paid in the month after the sale } & 60 \% \
\text { Percent paid in the second month after the sale } & 8 \%
\end{array}$ $\begin{array}{ll}
\text { May } & \$ 100,000 \
\text { June } & \$ 120,000 \
\text { July } & \$ 130,000 \
\text { August (expected) } & \$ 150,000
\end{array}$
-Refer to the Figure.What cash is budgeted to be collected on account in August?

Question

Miso Company makes all its sales on account. Accounts receivable payment experience is as follows:
Miso provided information on sales as follows:
 $\begin{array}{lr}
\text { Percent paid in the month of sale } & 30 \% \
\text { Percent paid in the month after the sale } & 60 \% \
\text { Percent paid in the second month after the sale } & 8 \%
\end{array}$ $\begin{array}{ll}
\text { May } & \$ 100,000 \
\text { June } & \$ 120,000 \
\text { July } & \$ 130,000 \
\text { August (expected) } & \$ 150,000
\end{array}$
-Refer to the Figure.What cash is budgeted to be collected on account in August?

Quizplus · Accepted Answer

The cash budgeted to be collected in August includes payments from sales made in May, June, and July, calculated as follows:- From July sales (30% of $130,000): $130,000 * 30% = $39,000- From June sales (60% of $120,000): $120,000 * 60% = $72,000- From May sales (8% of $100,000): $100,000 * 8% = $8,000Adding these amounts together gives: $39,000 + $72,000 + $8,000 = $119,000Additionally, 30% of August sales (expected $150,000) are paid in the same month: $150,000 * 30% = $45,000Therefore, the total cash budgeted to be collected in August is $119,000 + $45,000 = $164,000. However, this total is not among the provided options, indicating a mistake in my initial calculation. Let's correct the calculation based on the provided options and the correct approach to find the intended answer.Correcting the approach based on the options given and the correct calculation method:- From July sales (30% of $130,000): $130,000 * 30% = $39,000- From June sales (60% of $120,000): $120,000 * 60% = $72,000- From May sales (8% of $100,000): $100,000 * 8% = $8,000- Plus, 100% of August sales are considered for the same month's collection, which is a misunderstanding of the given data. The correct calculation should only consider the percentages given for the timing of payments.Correct calculation based on the provided data and options:- 30% of August sales: $150,000 * 30% = $45,000- 60% of July sales: $130,000 * 60% = $78,000- 8% of June sales: $120,000 * 8% = $9,600Total cash collected in August = $45,000 (August) + $78,000 (July) + $9,600 (June) = $132,600The correct answer is D, $132,600, based on the corrected understanding and calculation of the cash collections for August.

Miso Company Makes All Its Sales on Account -Refer to the Figure