Maraa Company's budget includes the following credit sales for the current year: August, $25,000; September, $36,000; October, $30,000; November, $32,000. Experience has shown that payment for the credit sales is received as follows: 15% in the month of sale, 60% in the first month after sale, 20% in the second month after sale, and 5% is uncollectible. How much cash can Marra expect to collect in October as a result of current and past credit sales? Group of answer choices 1)$19,700. 2)$30,000. 3)$31,100. 4)$28,500. 5)$33,900.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Maraa Company's budget includes the following credit sales for the current year: August, $25,000; September, $36,000; October, $30,000; November, $32,000. Experience has shown that payment for the credit sales is received as follows: 15% in the month of sale, 60% in the first month after sale, 20% in the second month after sale, and 5% is uncollectible. How much cash can Marra expect to collect in October as a result of current and past credit sales?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
