Dove Corporation began its operations on September 1 of the current year. Budget

Question

Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $250,000, $320,000, and $410,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale, 30% in the month following the sale.

The cash collections in October are:
$320,000
$248,000
$304,250
$382,500 Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $250,000, $320,000, and $410,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale, 30% in the month following the sale.

The cash collections in October are: $320,000 $248,000 $304,250 $382,500
$320,000
$248,000
$304,250
$382,500

Explanation / Answer

Cash collections in October = (320000*25%)+(250000*75%*30%)+(320000*75%*70%)= $304250 Option 3 is correct

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