Parlee Company's sales are 30% in cash and 70% on credit. Sixty percent of the credit sales are collected in the month of sale, 25% in the month following sale, and 12% in the second month following sale. The remainder are uncollectible. The following are budgeted sales data: $$\begin{array} { | l | l | l | l | l | }
\hline & \text { January } & \text { February } & \text { March } & \text { April } \
\hline \text { Total sales } & \$ 60,000 & \$ 70,000 & \$ 50,000 & \$ 30,000 \
\hline
\end{array}$$ Total cash receipts in April would be budgeted to be:

Question

Parlee Company's sales are 30% in cash and 70% on credit. Sixty percent of the credit sales are collected in the month of sale, 25% in the month following sale, and 12% in the second month following sale. The remainder are uncollectible. The following are budgeted sales data: $$\begin{array} { | l | l | l | l | l | } 
\hline & \text { January } & \text { February } & \text { March } & \text { April } \
\hline \text { Total sales } & \$ 60,000 & \$ 70,000 & \$ 50,000 & \$ 30,000 \
\hline
\end{array}$$ Total cash receipts in April would be budgeted to be:

Quizplus · Accepted Answer

April's cash receipts come from: - 30% of April's sales in cash = 0.30 * $30,000 = $9,000.- 60% of April's credit sales = 0.60 * 0.70 * $30,000 = $12,600.- 25% of March's credit sales = 0.25 * 0.70 * $50,000 = $8,750.- 12% of February's credit sales = 0.12 * 0.70 * $70,000 = $5,880.Adding these amounts gives $9,000 + $12,600 + $8,750 + $5,880 = $36,230.

Parlee Company's Sales Are 30% in Cash and 70% on Credit