Astor Manufacturing has the following budgeted sales: January $120000 February $180000 and March $150000. 40% of the sales are for cash and 60% are on credit. For the credit sales 50% are collected in the month of sale and 50% the next month. The total expected cash receipts during March are:
A) $168000.
B) $159000.
C) $157500.
D) $150000.

Question

Quizplus · Accepted Answer

In March, cash receipts include: 40% of March sales ($150,000 * 40% = $60,000), 50% of March credit sales ($150,000 * 60% * 50% = $45,000), and 50% of February credit sales ($180,000 * 60% * 50% = $54,000). Total = $60,000 + $45,000 + $54,000 = $159,000.

Astor Manufacturing Has the Following Budgeted Sales: January $120000 February