Oakton Furniture provided the following information relevant to its sales for December Year 1 and the first quarter of Year 2: Based on the company's collection history, 42% of credit sales are collected in month of sale and the remainder is collected in the following month. Total budgeted cash receipts in February are expected to be:

Question

Oakton Furniture provided the following information relevant to its sales for December Year 1 and the first quarter of Year 2:  Based on the company's collection history, 42% of credit sales are collected in month of sale and the remainder is collected in the following month. Total budgeted cash receipts in February are expected to be:

Quizplus · Accepted Answer

Budgeted cash receipts for February = (January credit sales × Percent collected in month following month of sale) + (February credit sales × Percent collected in month of sale) + February cash sales
Budgeted cash receipts for February = [($280,000 × (100% - 42%)] + [$310,000 × 42%] + $60,000 = $162,400 + $130,200 + $60,000 = $352,600

Oakton Furniture Provided the Following Information Relevant to Its Sales