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10 August, 03:12

Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $235,000, $314,000, and $400,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale and 30% in the month following the sale. The cash collections expected in October are a.$296,225 b.$269,840 c.$285,640 d.$222,840

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  1. 10 August, 03:40
    0
    Total Cash = $296,225

    Explanation:

    Giving the following information:

    Sales:

    September = $235,000

    October = $314,000

    The company expects to sell 25% of its merchandise for cash.

    Of sales on account, 70% are expected to be collected in the month of the sale and 30% in the month following the sale.

    Cash collection for October:

    Sales in cash = (314,000*0.25) = 78,500

    Sales in account:

    From September = (235,000*0.75) * 0.3 = 52,875

    From October = (314,000*0.75) * 0.70 = 164,850

    Total Cash = $296,225
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