FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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![### Budgeted Cash Receipts Calculation
Rugged Bicycles, Inc. collects 25% of its sales on account in the month of the sale and 75% in the month following the sale. If sales are budgeted to be $400,000 for March and $450,000 for April, what are the budgeted cash receipts from sales on account for April?
#### Calculation:
1. **March Collections:**
- 25% of March sales collected in March:
\[
0.25 \times 400,000 = 100,000
\]
- 75% of March sales collected in April:
\[
0.75 \times 400,000 = 300,000
\]
2. **April Collections:**
- 25% of April sales collected in April:
\[
0.25 \times 450,000 = 112,500
\]
3. **Total Cash Receipts for April:**
- Total collections in April from March and April sales:
\[
300,000 + 112,500 = 412,500
\]
Thus, the budgeted cash receipts from sales on account for April amount to $412,500.](https://content.bartleby.com/qna-images/question/41ce1bc7-74eb-4525-89a8-f943ede8cec5/89117f41-11b2-499d-974e-bc9e72ecc174/6ba29ao_processed.jpeg)
Transcribed Image Text:### Budgeted Cash Receipts Calculation
Rugged Bicycles, Inc. collects 25% of its sales on account in the month of the sale and 75% in the month following the sale. If sales are budgeted to be $400,000 for March and $450,000 for April, what are the budgeted cash receipts from sales on account for April?
#### Calculation:
1. **March Collections:**
- 25% of March sales collected in March:
\[
0.25 \times 400,000 = 100,000
\]
- 75% of March sales collected in April:
\[
0.75 \times 400,000 = 300,000
\]
2. **April Collections:**
- 25% of April sales collected in April:
\[
0.25 \times 450,000 = 112,500
\]
3. **Total Cash Receipts for April:**
- Total collections in April from March and April sales:
\[
300,000 + 112,500 = 412,500
\]
Thus, the budgeted cash receipts from sales on account for April amount to $412,500.
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