Answer the following questions using the information below:
The following information pertains to the January operating budget for Canberra Corporation.
∙ Budgeted sales for January $100 000 and for February $200 000.
∙ Collections for sales are 70% in the month of sale and 30% the next month.
∙ Gross margin is 30% of sales.
∙ Administrative costs are $10 000 each month.
∙ Beginning accounts receivable is $20 000.
∙ Beginning inventory is $14 000.
∙ Beginning accounts payable is $60 000.(All from inventory purchases. )
∙ Purchases are paid in full the following month.
∙ Desired ending inventory is 20% of next month's cost of goods sold (COGS).
-For January,budgeted cash collections are:

Question

Quizplus · Accepted Answer

The budgeted sales for January are $100,000. The collections for sales in January will be 70% of $100,000, which is $70,000. The collections for February sales will be 30% of February's budgeted sales ($200,000), which is $60,000. Thus, the total budgeted cash collections for January are $70,000 + $60,000 = $90,000.

Answer the Following Questions Using the Information Below