Sugar Pine Inc.collects 30% of its sales in the month of sale and the other 70% in the following month.The following shows budgeted sales for January through March.

What is the amount of cash receipts budgeted for February?
A)$97,500
B)$271,250
C)$272,500
D)$302,500
E)None of the answer choices is correct.

Question

Sugar Pine Inc.collects 30% of its sales in the month of sale and the other 70% in the following month.The following shows budgeted sales for January through March.

What is the amount of cash receipts budgeted for February?
A)$97,500 
B)$271,250 
C)$272,500 
D)$302,500 
E)None of the answer choices is correct.

Quizplus · Accepted Answer

To calculate the cash receipts budgeted for February, we need to add up the sales for two months - January and February. 
Sales for January = $250,000
30% of the sales collected in January = 0.3 x $250,000 = $75,000
Sales for February = $350,000
30% of the sales collected in February = 0.3 x $350,000 = $105,000
70% of the sales collected in January = 0.7 x $250,000 = $175,000
Total cash receipts budgeted for February = $75,000 + $105,000 + $175,000 = $272,500
Therefore, the correct answer is (C) $272,500.