The Model Company Is to Begin Operations in April

question 137

Multiple Choice

The Model Company is to begin operations in April. It has budgeted April sales of $30,000, May sales of $34,000, June sales of $40,000, July sales of $42,000, and August sales of $38,000. Note that 10% of each month's sales is expected to represent cash sales; 75% of the balance is expected to be collected in the month following the sale, 17% the second month, 6% the third month, and the balance is expected to be uncollectible.
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What is the amount of cash to be collected in the month of August?

• A) $40,106.
• B) $40,340.
• C) $38,036.
• D) $44,140.

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Definitions:

Assumptions

Premises or beliefs taken as true without verification, often serving as starting points for reasoning and decision-making.

Realities

The actual condition of affairs, contrasting with a theoretical or imagined scenario.

Excited

The state of being energized or enthusiastic about something, often with anticipation or eagerness.

Anxious

Experiencing worry, unease, or nervousness, typically about an imminent event or something with an uncertain outcome.