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Grover has forecast sales to be $125,000 in February, $135,000 in March, $150,000 in April, and $140,000 in May. The average cost of goods sold is 70% of sales. All sales are on made on credit and sales are collected 60% in the month of sale, and 40% the month following. What are budgeted cash receipts in March?

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Shahzaibfaraz

Answer:

The budgeted cash receipts for March is $131000

Explanation:

The cash receipts in March will contain the cash received from accounts receivable for the amount of 40% of the sales value for February and 60% for the sales value of March. Thus the cash receipts in March will be,

Cash receipts-March = 40% * February sales revenue + 60% * March sales revenue

Cash receipts-March = 0.4 * 125000 + 0.6 * 135000

Cash receipts-March = $131000

tanseershar

Answer:

$206,000

Explanation:

It is assumed that cost of sales effect is nil and its outflow also not clearly defined for purchases made during the period.

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