A company is formulating its plans for the coming year, including the preparation of its...
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Accounting
A company is formulating its plans for the coming year, including the preparation of its cash budget. Historically, the company's sales are 30% cash. The remaining sales are on credit with the following collection pattern:
| Collections on Account | Percentage | |||
| In the month of sale | 40 | % | ||
| In the month following the sale | 58 | % | ||
| Uncollectible | 2 | % | ||
Sales for the first 5 months of the coming year are forecast as follows:
| January | $ | 3,720,000 | |
| February | 4,020,000 | ||
| March | 3,820,000 | ||
| April | 4,220,000 | ||
| May | 4,420,000 | ||
For the month of April, the total cash receipts from sales and collections on accounts would be: (CIA adapted)
$3,943,928.
$3,998,520.
$4,661,000.
$4,256,100.
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