Wright Corporation began its operations on September 1 of the current year. Budg
ID: 2470886 • Letter: W
Question
Wright Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $248,743, $318,866, and $416,281, 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. What are the cash collections in September from sales on account?
Select the correct answer. $248,743
$139,296
$189,045
$49,749
Explanation / Answer
Particulars
Sep
Oct
Nov
Sales
$ 248,743
$ 318,866
$ 416,281
Cash sales
$ 49,749
$ 63,773
$ 83,256
Credit Sales
$ 198,994
$ 255,093
$ 333,025
Collections from current month credit sales @ 70%
$ 139,296
$ 178,565
$ 233,117
Colletions of Previous Month credit Sales @ 25%
$ 49,749
$ 63,773
Colletions of Two Months back credit sales@ 5%
$ 9,950
Total Collections
$ 189,045
$ 292,087
$ 390,096
Collections in Sep =$189,045
Particulars
Sep
Oct
Nov
Sales
$ 248,743
$ 318,866
$ 416,281
Cash sales
$ 49,749
$ 63,773
$ 83,256
Credit Sales
$ 198,994
$ 255,093
$ 333,025
Collections from current month credit sales @ 70%
$ 139,296
$ 178,565
$ 233,117
Colletions of Previous Month credit Sales @ 25%
$ 49,749
$ 63,773
Colletions of Two Months back credit sales@ 5%
$ 9,950
Total Collections
$ 189,045
$ 292,087
$ 390,096
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