Market Leasing budgeted credit sales in the first quarter of 2014 to be as follows: $$\begin{array} { l r }
\text { January } & \$ 210,000 \
\text { February } & 190,000 \
\text { March } & 170,000
\end{array}$$ The budgeted beginning cash balance at February 1 is expected to be $14,000 and budgeted monthly cash disbursements are expected to be $198,000. Credit sales in December, 2013 are expected to be $204,000. The company expects to collect 20% of a month's sales in the month of sale and 80% in the following month. How much is the budgeted cash balance at the end of February?

Question

Market Leasing budgeted credit sales in the first quarter of 2014 to be as follows: $$\begin{array} { l r } 
\text { January } & \$ 210,000 \
\text { February } & 190,000 \
\text { March } & 170,000
\end{array}$$ The budgeted beginning cash balance at February 1 is expected to be $14,000 and budgeted monthly cash disbursements are expected to be $198,000. Credit sales in December, 2013 are expected to be $204,000. The company expects to collect 20% of a month's sales in the month of sale and 80% in the following month. How much is the budgeted cash balance at the end of February?

Quizplus · Accepted Answer

Beginning cash balance + Cash collected in February - Cash disbursements = Ending cash balance$14,000 + ($210,000 x 20%) + ($190,000 x 80%) - $198,000 = $22,000

Market Leasing Budgeted Credit Sales in the First Quarter of 2014