Budgeted Sales in Washburn Company Over the Next Four Months

question 123

Multiple Choice

Budgeted sales in Washburn Company over the next four months are given below:
$$\begin{array} { l c l c r } & \text { September } & \text { October } & \text { Novernber } & \text { December } \\\text { Budgeted sales } & \$ 100,000 & \$ 160,000 & \$ 180,000 & \$ 120,000\end{array}$$
Twenty-five percent 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 is uncollectible. Given these data, cash collections for December should be:

• A) $138,000.
• B) $133,500.
• C) $120,000.
• D) $103,500.

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Definitions:

Ear Lobe

The lower, fleshy, outer portion of the ear, often where earrings are worn.

Angle of the Jaw

The external angle formed by the junction of the lower edge of the mandible and the posterior edge, near where the jawbone curves upwards towards the ear.

Craniosynostosis

A congenital condition where one or more of the fibrous sutures in an infant's skull prematurely fuses by turning into bone, affecting skull and brain growth.

Fontanels

Soft spots on a baby's skull where the bones haven't fused together yet, allowing for growth of the brain and skull.