Oakton Furniture provided the following information relevant to its sales for December Year 1 and the first quarter of Year 2: $$\begin{array} { l c c c c }
& \begin{array} { c }
\text { Dec. Year 1 } \
\text { (Actual) }
\end{array} & \begin{array} { c }
\text { Jan Year 2 } \
\text { (Budgeted) }
\end{array} & \begin{array} { c }
\text { Feb. Year 2 } \
\text { (Budgeted) }
\end{array} & \begin{array} { c }
\text { Mar. Year 2 } \
\text { (Budgeted) }
\end{array} \
\text { Credit sales } & \$ 120,000 & \$ 280,000 & \$ 310,000 & \$ 220,000 \
\text { Cash sales } & \$ 20,000 & \$ 50,000 & \$ 60,000 & \$ 24,000
\end{array}$$ 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:
A) $60,000.
B) $162,400.
C) $352,600.
D) $228,000.

Question

Oakton Furniture provided the following information relevant to its sales for December Year 1 and the first quarter of Year 2: $$\begin{array} { l c c c c } 
& \begin{array} { c } 
\text { Dec. Year 1 } \
\text { (Actual) }
\end{array} & \begin{array} { c } 
\text { Jan Year 2 } \
\text { (Budgeted) }
\end{array} & \begin{array} { c } 
\text { Feb. Year 2 } \
\text { (Budgeted) }
\end{array} & \begin{array} { c } 
\text { Mar. Year 2 } \
\text { (Budgeted) }
\end{array} \
\text { Credit sales } & \$ 120,000 & \$ 280,000 & \$ 310,000 & \$ 220,000 \
\text { Cash sales } & \$ 20,000 & \$ 50,000 & \$ 60,000 & \$ 24,000
\end{array}$$ 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:
A) $60,000.
B) $162,400.
C) $352,600.
D) $228,000.

Quizplus · Accepted Answer

To calculate the total budgeted cash receipts for February, we need to consider both the cash sales for February and the collections from credit sales made in January and February. - Cash sales in February: $60,000- 42% of February's credit sales ($310,000 * 42% = $130,200) are collected in February.- The remainder of January's credit sales (58% of $280,000 = $162,400) are collected in February.Adding these amounts gives us the total budgeted cash receipts for February: $60,000 (cash sales) + $130,200 (February credit sales collected in February) + $162,400 (January credit sales collected in February) = $352,600.

Oakton Furniture Provided the Following Information Relevant to Its Sales