Question

Gallonte Inc. began operations in April of this year. It makes all sales on account, subject to the following collection pattern: 25% are collected in the month of sale; 55% are collected in the first month after sale; and 20% are collected in the second month after sale. If sales for April, May, and June were $57,000, $77,000, and $67,000, respectively, what were the firm's budgeted collections for June?

Answer 1

Total= $70,510

Step-by-step explanation:

Giving the following information:

25% are collected in the month of sale; 55% are collected in the first month after the sale, and 20% are collected in the second month after sale. The sales for April, May, and June were $57,000, $77,000, and $67,000, respectively.

Cash collection:

June= 67,000*0.25= 16,750

From May= 77,000*0.55= 42,360

From April= 57,000*0.2= 11,400

Total= $70,510