Question

Budgeted sales in Acer Corporation over the next four months are given below:

September October November December

Budgeted Sales $140,000 $150,000 $170,000 $130,000

25% of the company's sales are for cash and 75% are on account. Collections for sales on account follow a stable pattern as follows: 50% of a month's credit sales are collected in the month of sale, 30% are collected in the month following sale, and 15% are collected in the second month following sale. The remainder are uncollectable. Given these data, cash collections for December should be:

A. $103,875

B. $98,125

C.$136,275

D.$119,500

Answer 1