Figure 2
Budgeted sales for the second quarter of the current year are as follows:
The company collects 20 percent in the month of sale, 70 percent in the first month following the sale, and 10 percent in the second month following the sale.
-Refer to Figure 2. April sales to be collected in May are

A) £30,000
B) £105,000
C) £104,000
D) £-0-

Question

Figure 2
Budgeted sales for the second quarter of the current year are as follows:
The company collects 20 percent in the month of sale, 70 percent in the first month following the sale, and 10 percent in the second month following the sale.
-Refer to Figure 2. April sales to be collected in May are

A) £30,000 
B) £105,000 
C) £104,000 
D) £-0-

Quizplus · Accepted Answer

According to the given information, 20% of April sales will be collected in the month of sale (i.e. April), which is £20,000. The remaining 80% (£80,000) will be collected in the following two months - 70% in May and 10% in June. Therefore, the amount to be collected in May is 70% of £80,000, which is £56,000. Adding the amount collected in April (£20,000), the total amount to be collected in May is £76,000. Hence, option B is the correct answer.

Figure 2 Budgeted Sales for the Second Quarter of the Current Year