Question

Maple Inc. collects 30% of its sales in the month of sale and the other 70% in the following month. The following shows budgeted sales for January through March.
January $250,000
February $325,000
March $387,500
What is the amount of cash receipts budgeted for February?

Answer 1

Answer:

$272,500

Explanation:

The computation of the budgeted cash receipts for February month is shown below:

= February sales × collection percentage + January sales × following month collection percentage

= $325,000 × 30% + $250,000 × 70%

= $97,500 + $175,000

= $272,500

We simply compute the sales based on the collection percentage

All other information which is given is not relevant. Hence, ignored it