Bendigo Resources makes all sales on credit with 40% of the payment received in the month of sale, 40% in the month following the sale and the remaining 20% in the subsequent month.
Budgeted sales are as follows:
January $100 000
February $140 000
March $120 000
The budgeted receipts from debtors during March are:

Question

Quizplus · Accepted Answer

To calculate the budgeted receipts from debtors during March, we need to figure out how much of the credit sales from January, February, and March will be received in March.

For January sales, 40% will be received in March: $100,000 x 0.4 = $40,000

For February sales, 40% will also be received in March: $140,000 x 0.4 = $56,000

For March sales, only 20% will be received in March: $120,000 x 0.2 = $24,000

Adding these amounts gives us the total budgeted receipts from debtors during March:

$40,000 + $56,000 + $24,000 = $120,000

Therefore, the answer is C.

Bendigo Resources Makes All Sales on Credit with 40% of the Payment