Correy Inc. reported the following information for 2019: $\begin{array}{llll}&\text { October }& \text { November }& \text { December }\
\text { Budgeted sales } & \$ 460,000 & \$ 440,000 & \$ 540,000 \
\text { Budgeted purchases } & \$ 240,000 & \$ 256,000 & \$ 288,000
\end{array}$ All sales are on credit.

-Customer amounts on account are collected 50% in the month of sale and 50% in the following month.
-Cost of goods sold is 35% of sales.
-Correy purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month.
-Accounts payable is used only for inventory acquisitions.
How much cash will Correy receive during November?

Question

Correy Inc. reported the following information for 2019: $\begin{array}{llll}&\text { October }& \text { November }& \text { December }\
\text { Budgeted sales } & \$ 460,000 & \$ 440,000 & \$ 540,000 \
\text { Budgeted purchases } & \$ 240,000 & \$ 256,000 & \$ 288,000
\end{array}$ All sales are on credit.

-Customer amounts on account are collected 50% in the month of sale and 50% in the following month.
-Cost of goods sold is 35% of sales.
-Correy purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month.
-Accounts payable is used only for inventory acquisitions.
How much cash will Correy receive during November?

Quizplus · Accepted Answer

Correy will receive 50% of November sales ($440,000 * 50% = $220,000) and 50% of October sales ($460,000 * 50% = $230,000) in November. Total cash received in November is $220,000 + $230,000 = $450,000.

Correy Inc All Sales Are on Credit