Baltimore Baking is preparing its cash budget and expects to have sales of $30,000 in January, $35,000 in February, and $35,000 in March.If 20% of sales are for cash, 40% are credit sales paid in the month after the sale, and another 40% are credit sales paid 2 months after the sale, what are the expected cash receipts for March?

Question

Quizplus · Accepted Answer

In March, cash receipts include: 20% of March sales ($35,000 * 20% = $7,000), 40% of February sales ($35,000 * 40% = $14,000), and 40% of January sales ($30,000 * 40% = $12,000). Total cash receipts for March = $7,000 + $14,000 + $12,000 = $33,000.

Baltimore Baking Is Preparing Its Cash Budget and Expects to Have