Cave Hardware's forecasted sales for April,May,June,and July are $200,000,$230,000,$190,000,and $240,000,respectively.Sales are 65% cash and 35% credit with all accounts receivables collected in the month following the sale.Cost of goods sold is 75% of sales and ending inventory is maintained at $60,000 plus 10% of the following month's cost of goods sold.All inventory purchases are paid 22% in the month of purchase and 78% in the following month.
What are the cash collections budgeted for June at Cave Hardware?

Question

Quizplus · Accepted Answer

D)
May Sales $230,000 × 35% = 80,500 × 100% = $80,500
June 190,000 × 35% = 66,500 × 00 = 00000
Cash Sales June $190,000 × 65% 123,500
Total Cash Collected 204,000

Cave Hardware's Forecasted Sales for April,May,June,and July Are $200,000,$230,000,$190,000,and $240,000,respectively