Nuthath Corporation began its operations on September 1 of the current year. Bud

Question

Nuthath Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $260,000, $350,000, and $400,000, respectively for September, October, and November. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale.

The cash collections in September from accounts recievable are:

A. $223,600 B. $145,600 C. $192,000 D. $168,000

The cash collections in October from accounts recievable are:

A. $232,400 B. $240,000 C. $210,000 D. $337,400

The cash collections in November from accounts recievable are:

A. $294,000 B. $336,000 C. $295,200 D. $273,000

Explanation / Answer

September :

260000*30% = 78000 + 182000* 80% = 223600 A

October d) 337400

November b) 336000

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