1.Company is budgeting for cash receipts for each month in the 1st quarter of 2016. Expected...

Question:

1.Company is budgeting for cash receipts for each month in the 1st quarter of 2016. Expected sales: 20% of sales are made for cash and 80% on account.60% of credit sales are collected in the same month. 30% collected in the following month and 10% collected in the second month after sales. Calculate budgeted cash collection for the month of March.

Budgeted Cash Collections:

This is a term used while preparing the master budget. This refers to the expected cash collection form the customers withing a time period who has purchased the material or stock on credit.

Answer and Explanation:

Answer: Let assumes the sales in the quarter is 600000 which is as follows:

Jan=100000

Feb=200000

March=300000

ASSUME SALES $100,000 $200,000 $30...

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Cash Collection & Concentration: Definition & Components

from Finance 101: Principles of Finance

Chapter 18 / Lesson 3
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