Question 21.6: Landon Awards Co. collects 25% of its sales on account in th...

Financial and Managerial Accounting

Landon Awards Co. collects 25% of its sales on account in the month of the sale and 75% in the month following the sale. If sales on account are budgeted to be $100,000 for March and $126,000 for April, what are the budgeted cash receipts from sales on account for April?

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April

Collections from March sales (75% × $100,000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 75,000
Collections from April sales (25% × $126,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,500
Total receipts from sales on account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $\underline{\underline{\$ \ 106,500}}$

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