Budgeted sales in Allen Company over the next four months are given below:
Twenty-five percent of the company's sales are for cash,and 75% are on account.Collections for sales on account follow a stable pattern as follows: 50% of a month's sales are collected in the month of sale,30% are collected in the month following sale,and 15% are collected in the second month following sale.The remainder is uncollectible.Given these data,what should be cash collections for December?
A) $133,500.
B) $120,000.
C) $138,000.
D) $153,000.

Question

Budgeted sales in Allen Company over the next four months are given below: 
Twenty-five percent of the company's sales are for cash,and 75% are on account.Collections for sales on account follow a stable pattern as follows: 50% of a month's sales are collected in the month of sale,30% are collected in the month following sale,and 15% are collected in the second month following sale.The remainder is uncollectible.Given these data,what should be cash collections for December?
A) $133,500. 
B) $120,000. 
C) $138,000. 
D) $153,000.

Quizplus · Accepted Answer

The Answer of Budgeted sales in Allen Company over the next four months are given below: 
Twenty-five percent of the company's sales are for cash,and 75% are on account.Collections for sales on account follow a stable pattern as follows: 50% of a month's sales are collected in the month of sale,30% are collected in the month following sale,and 15% are collected in the second month following sale.The remainder is uncollectible.Given these data,what should be cash collections for December?
A) $133,500. 
B) $120,000. 
C) $138,000. 
D) $153,000.

Budgeted Sales in Allen Company Over the Next Four Months