1-Quattro began operations in April of this year. It makes all sales on account,

Question

1-Quattro began operations in April of this year. It makes all sales on account, subject to the following collection patten..30% are collected in the month of the sale, 60% collected in the first month after the sale. If sales for April and May were 60k and 80k, what is the firms budgeted collections for April?

2-Trumbull Corporation budgeted sales on account for 120k for july, 211k for august, and 318k for september. None will be collected in month of the sale,60% will be collected i the month after the sale,36% in the second month. The cash receipts from accounts recievable that should be budgeted foe september would be...

For numb 2, i dont get how the answer is 169.8k. Shouldnt the answer be 198k, since all the information pretains to after the sale not before the sale, which is july and august?

Explanation / Answer

1) Calculate firms budget collections for april = (60K*30%) = 18K

2) Cash receipt from account receivable = (120K*36%+211K*60%) = 169.8K

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