Caribbean Tool and Die Company's forecasted sales for April, May, June and July are $150 000, $225 000, $180 000, and $210 000, respectively. Sales are 50% cash and 50% credit with all accounts receivables collected in the month following the sale.
What are the cash collections budgeted for June?

Question

Quizplus · Accepted Answer

50% of the sales in June are collected in June, and 50% of the sales in May are collected in June. So, the cash collections budgeted for June are $180,000 * 50% + $225,000 * 50% = $90,000 + $112,500 = $202,500.

Caribbean Tool and Die Company's Forecasted Sales for April, May