Bright Minds Toy Company prepared the following sales budget for the second quarter. Projected sales for each of the first three months of operations are as follows: Bright Minds expects to collect 70% of the sales on account in the month of sale, and 20% in the month following the sale, and the remainder in the second month following the sale.
What is the amount of budgeted cash collections for June?

Question

Bright Minds Toy Company prepared the following sales budget for the second quarter. Projected sales for each of the first three months of operations are as follows:  Bright Minds expects to collect 70% of the sales on account in the month of sale, and 20% in the month following the sale, and the remainder in the second month following the sale.
What is the amount of budgeted cash collections for June?

Quizplus · Accepted Answer

Budgeted cash receipts for June = (April credit sales × Percent collected in second month following month of sale) + (May credit sales × Percent collected in month following month of sale) + (June credit sales × Percent collected in month of sale) + June cash sales
Budgeted cash receipts for June = ($370,000 × 10%) + ($432,000 × 20%) + ($405,000 × 70%) + $55,000 = $37,000 + $86,400 + $283,500 + $55,000 = $461,900

Bright Minds Toy Company Prepared the Following Sales Budget for the Second