Oakton Furniture provided the following information relevant to its sales for December 2013 and the first quarter of 2014 $\begin{array}{|l|r|r|r|r|}
\hline & \text { dec.2014}& \text {jan.2014 }& \text { feb.2014}& \text { mar.2014}\
\hline & {\text { (Actual) }} & \text { (Budgeted) } & {\text { (Budgeted) }} & {\text { (Budgeted) }} \
\hline \text { Credit sales } & \$ 120,000 & \$ 280,000 & \$ 310,000 & \$ 220,000 \
\hline \text { Cash sales } & \$ 20,000 & \$ 50,000 & \$ 60,000 & \$ 24,000\\hline
\end{array}$ Based on the company's collection history, 2% of credit sales are uncollectible, 40% are collected in month of sale and the remainder is collected in the following month. Total budgeted cash receipts in February 2014 are expected to be:

Question

Oakton Furniture provided the following information relevant to its sales for December 2013 and the first quarter of 2014 $\begin{array}{|l|r|r|r|r|}
\hline & \text { dec.2014}& \text {jan.2014 }& \text { feb.2014}& \text { mar.2014}\
\hline & {\text { (Actual) }} & \text { (Budgeted) } & {\text { (Budgeted) }} & {\text { (Budgeted) }} \
\hline \text { Credit sales } & \$  120,000 & \$  280,000 & \$  310,000 & \$  220,000 \
\hline \text { Cash sales } & \$  20,000 & \$  50,000 & \$  60,000 & \$  24,000\\hline 
\end{array}$ Based on the company's collection history, 2% of credit sales are uncollectible, 40% are collected in month of sale and the remainder is collected in the following month. Total budgeted cash receipts in February 2014 are expected to be:

Quizplus · Accepted Answer

In February 2014, cash receipts include 60% of January's credit sales ($280,000 * 60% = $168,000), 40% of February's credit sales ($310,000 * 40% = $124,000), and February's cash sales ($60,000). Total = $168,000 + $124,000 + $60,000 = $352,000. However, since 2% of credit sales are uncollectible, the correct calculation should be $168,000 + $124,000 + $60,000 - $5,600 (2% of $280,000) = $346,400.

Oakton Furniture Provided the Following Information Relevant to Its Sales