Asked by Heath Gillette on May 22, 2024
Verified
Sioux Corporation is estimating the following sales for the first four months of next year: Sales are normally collected 60% in the month of sale and 40% in the month following the sale. Based on this information, how much cash should Sioux expect to collect during the month of April?
A) $370,000
B) $222,000
C) $119,000
D) $358,000
Sales
The revenue earned from selling goods or services to customers.
- Compute cash receipts from projected sales and revenue collection strategies.
Verified Answer
SB
sheba baidooMay 25, 2024
Final Answer :
D
Explanation :
To determine the cash collected in April, we need to calculate the sales that are due from March and April:
Sales due from March = $900,000 x 40% = $360,000
Sales due from April = $1,100,000 x 60% = $660,000
Total cash expected to be collected in April = Sales due from March + Sales due from April = $360,000 + $660,000 = $1,020,000
Therefore, the correct answer is D) $358,000.
Sales due from March = $900,000 x 40% = $360,000
Sales due from April = $1,100,000 x 60% = $660,000
Total cash expected to be collected in April = Sales due from March + Sales due from April = $360,000 + $660,000 = $1,020,000
Therefore, the correct answer is D) $358,000.
Learning Objectives
- Compute cash receipts from projected sales and revenue collection strategies.
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