Dayton has forecast sales to be $205,000 in February,$270,000 in March,$290,000 in April,and $310,000 in May.The average cost of goods sold is 60% of sales.All sales are made on credit and sales are collected 50% in the month of sale,30% the month following and the remainder two months after the sale.What are budgeted cash receipts in May?

Question

Quizplus · Accepted Answer

To calculate the budgeted cash receipts for May, we need to consider the collections from sales made in February, March, and April, based on the given collection pattern. - 50% of May sales: 0.50 * $310,000 = $155,000 (since May sales are collected in May itself)- 30% of April sales: 0.30 * $290,000 = $87,000 (April sales collected in May)- 20% of March sales: 0.20 * $270,000 = $54,000 (March sales collected in May)Adding these amounts gives us the total budgeted cash receipts for May: $155,000 + $87,000 + $54,000 = $296,000.

Dayton Has Forecast Sales to Be $205,000 in February,$270,000 in March,$290,000