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 above. Total cash collected in June will be
A) £180,000
B) £191,000
C) £90,000
D) £140,000

Question

Quizplus · Accepted Answer

To calculate the total cash collected in June, we need to take into account the sales from March, April, and May (which have different collection percentages).

Sales in March: £200,000 x 20% = £40,000 
Sales in April: £250,000 x 70% = £175,000 
Sales in May: £150,000 x 10% = £15,000

Total cash collected in June: £40,000 + £175,000 + £15,000 = £191,000

Therefore, the best choice is B, which is the correct total cash collected in June.

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