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18 March, 17:00

Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $250,000, $320,000, and $410,000, 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, 30% in the month following the sale.

The cash collections in October are:

$320,000

$248,000

$304,250

$382,500

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Answers (1)
  1. 18 March, 17:29
    0
    The correct answer is C.

    Explanation:

    Giving the following information:

    Budgeted sales for the first three months of business are $250,000, $320,000, and $410,000, 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, 30% in the month following the sale.

    Cash collection:

    Cash = 320,000*0,25 = 80,000

    Account = (320,000*0.75) * 0.7 = 168,000

    From September = (250,000*0.75) * 0.3 = 56,250

    Total = $304,250
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