Market Leasing budgeted credit sales in the first quarter of 2018 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, 2017 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 2018 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, 2017 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 at February 1 is $14,000.Cash receipts in February:20% of December sales = 0.20 x $204,000 = $40,80080% of January sales = 0.80 x $210,000 = $168,000Total cash receipts in February = $40,800 + $168,000 = $208,800Budgeted cash balance at the end of February = $14,000 + $208,800 - $198,000 = $22,800

Market Leasing Budgeted Credit Sales in the First Quarter of 2018