April Co. receives payment from customers for credit sales as follows:
- 30% in the month of sale
- 60% in the month following sale
- 8% in the second month following the sale
- 2% become bad debts and are never collected
The following sales are expected:
|
January |
$100,000 |
|
February |
$120,000 |
|
March |
$110,000 |
How much will be received in March?
- $96,000
- $113,000
- $30,000
- $110,000
Grobots Company prepared the following information for the upcoming four month period:
|
Month |
Budgeted Sales |
|
January |
$75,000 |
|
February |
78,000 |
|
March |
90,000 |
|
April |
110,000 |
|
Budgeted Expenses per Month |
|||
|
Salaries |
$25,000 |
Selling Cost |
$20,000 |
|
Depreciation |
$5,000 |
Insurance |
$3,000 |
Salaries and selling costs are paid during the month they are incurred. Insurance is paid quarterly on March 31, June 30, September 30, and Dec 31.
Sales are collected as follows: 30% in the month of sale, 65% in the month after sale, and 5% are uncollectable. Purchases are 30% of sales of a given month and are paid in full the following month.