Zinger Corporation has budgeted sales over the next four months below: September

Question

Zinger Corporation has budgeted sales over the next four months below: September October November December Budgeted Sales. $140,000 S150,000 S170,000 S130,000 Twenty five percent of the company's sales are or cash and 75% are on account Collections for sales on account o ow a stable pattern as folo s. 4 % of a month s credit sales are collected he month o sale. 32% are collected in he month following sale, and 1 % are collected in the second month following sale. The remainder are un collectible. ve these data, cash colections or ecember should e. Select one O a. $126.625.00 O b. $94,125.00 $158,000.00 O d. $370,000.00

Explanation / Answer

Calculate cash collection for december :

so answer is a) $126,625.00

Cash sales in december (130000*25%) 32500 Collection from credit sales December credit sales (130000*75%*42%) 40950 November credit sale (170000*75%*32%) 40800 October credit sale (150000*75%*11%) 12375 Total collection in december 126625

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