The Following Sales Budget Has Been Prepared Collections Are 50% in the Month of Sale, 40% in }

question 68

Multiple Choice

The following sales budget has been prepared: $\begin{array}{lcr}\text { Month } & \text { Cash Sales } & \text { Credit Sales } \\\text { September } & \$ 100,000 & \$ 200,000 \\\text { October } & 125,000 & 180,000 \\\text { November } & 130,000 & 210,000 \\\text { December } & 135,000 & 190,000\end{array}$ Collections are 50% in the month of sale, 40% in the month following the sale, and 10% two months following the sale.No uncollectible accounts are anticipated._____ is the estimated cash collection in November.

• A)$197,000
• B)$327,000
• C)$340,000
• D)$130,000

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Definitions:

Annual Rate

A percentage representing the interest or growth a sum of money would earn over the course of a year.

Discounted

Reduced in price or value, often to encourage purchase or reflect the present value of future cash flows.

Simple Interest

Simple interest is a method of calculating the interest charge on a loan or investment based on the original principal amount and not on accumulated interest.

Contract

A legally binding agreement between two or more parties that outlines terms and conditions.