All of Porter Corporation's sales are on account. Fifty percent of the credit sales are collected in the month of sale, 35% in the month following sale, and 10% in the second month following sale. The remainder are uncollectible. The following are budgeted sales data for the company:
Cash receipts in April are expected to be:
Cash collection schedule:
The cash collection schedule is prepared with the help of anticipated (pre-estimated) cash collection trend. The cash to be received during the current period includes the account receivables for the earlier period.
Answer and Explanation:
The correct answer is option (c).
Cash receipts in April are expected to be $711,300.
Explanation: Cash receipts in April are expected to be $711,300 ($614,000 x 10% + $694,000 x 35% + $814,000 x 50%).
Become a member and unlock all Study Answers
Try it risk-free for 30 daysTry it risk-free
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
from Finance 101: Principles of FinanceChapter 18 / Lesson 3