? , 1) Trumbull Corporation budgeted sales on account of S120,000 for July, S211

Question

? , 1) Trumbull Corporation budgeted sales on account of S120,000 for July, S211,000 for August, and S198,000 for September. Experience indicates that none of the sales on account will be collected in the month ofthe sale, 60% will be collected the month after the sale, 36% in the second month, and 4% will be uncollectible. The cash receipts from accounts receivable that should be budgeted for September would be: A. $169,800 B. S147,960 C. $197,880 D. $194,760 2) JT Department Store expects to generate the following sales for the next three months: July August September $580,000 $620,000 Expected sales$460,000 Ts cost of goods sold is 60% of sales dollars. At the end of each month, JT wants a merchandise inventory balance equal to 20% of the following month's expected cost of goods sold. What dollar amount of merchandise inventory should JT plan to purchase in August? A. $257,400 B. $314,600 C. $352,800 D. S327,800

Explanation / Answer

Dear student, only one question is allowed at a time. I am answering the first question

As given in the problem, collection in September

= 60% of August + 36% of July

= $211,000 x 60% + $120,000 x 36%

= $126,600 + $43,200

= $169,800

So, as per above calculations, option A is the correct option

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