Benjamin Corporation began its operations on September 1 of the current year.Budgeted sales for the first three months of business are $250,000, $300,000, and $420,000, respectively, for September, October, and November.The company expects to sell 20% of its merchandise for cash.Of sales on account, 70% are expected to be collected in the month of the sale, 25% in the month following the sale, and the remainder in the following month. The cash collections from accounts receivable in November are:
A) $305,200.
B) $294,000.
C) $235,200.
D) $381,500.

Question

Quizplus · Accepted Answer

In November, cash collections include: 20% of November sales ($420,000 * 20% = $84,000), 70% of October sales on account ($300,000 * 80% * 70% = $168,000), and 25% of September sales on account ($250,000 * 80% * 25% = $50,000). Total = $84,000 + $168,000 + $50,000 = $302,000.

Benjamin Corporation Began Its Operations on September 1 of the Current