Avril Company makes collections on sales according to the fo

Avril Company makes collections on sales according to the following schedule: 30% in the month of sale 64% in the month following sale The following sales have been are expected: Expected Sales January February March $110,000 Budgeted cash collections in March should be budgeted to be: o $100,600 o $100,000 O $106,400 O$100.400

Solution

Budgeted Cash Collection in March = $106,400

Particulars

Amount ($)

For January Sales [ $100,000 x 6% ]

6,000

For February Sales [ $110,000 x 64% ]

70,400

For March Sales [ $100,000 x 30% ]

30,000

Total Budgeted Cash Collection in March

$106,400

Particulars	Amount ($)
For January Sales [ $100,000 x 6% ]	6,000
For February Sales [ $110,000 x 64% ]	70,400
For March Sales [ $100,000 x 30% ]	30,000
Total Budgeted Cash Collection in March	$106,400