Benton Company's sales budget shows the following expected total sales: $\begin{array}{|l|c|}
\hline {\text { Month }} & \text { Sales } \
\hline \text { January } & \$ 25,000 \
\hline \text { February } & \$ 30,000 \
\hline \text { March } & \$ 35,000 \
\hline \text { Apnil } & \$ 40,000 \
\hline
\end{array}$ The company expects 80% of its sales to be on account (credit sales).Credit sales are collected as follows: 25% in the month of sale,72% in the month following the sale with the remainder being uncollectible and written off.The total cash receipts during April would be:

Question

Quizplus · Accepted Answer

In April, cash receipts include 25% of April's credit sales ($40,000 * 80% * 25% = $8,000) and 72% of March's credit sales ($35,000 * 80% * 72% = $20,160), totaling $28,160. Adding April's cash sales ($40,000 * 20% = $8,000) gives $36,160.

Benton Company's Sales Budget Shows the Following Expected Total Sales