Reference: 07-05
the LaGrange Company Had the Following Budgeted Sales

question 85

Multiple Choice

Reference: 07-05
The LaGrange Company had the following budgeted sales for the first half of the current year: $$\begin{array} { | l | l | l | } \hline & \text { Cash Sales } & \text { Credit Sales } \\\hline \text { January } & \$ 70,000 & \$ 340,000 \\\hline \text { February } & 50,000 & 190,000 \\\hline \text { March } & 40,000 & 135,000 \\\hline \text { April } & 35,000 & 120,000 \\\hline \text { May } & 45,000 & 160,000 \\\hline \text { June } & 40,000 & 140,000 \\\hline\end{array}$$ The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:
Collections on credit sales: 60% in month of sale
30% in month following sale
10% in second month following sale
The accounts receivable balance on January 1 of the current year was $70,000, of which $50,000 represents uncollected December sales and $20,000 represents uncollected November sales.
-The total cash collected by LaGrange Company during January would be:

• A)$331,500.
• B)$344,000.
• C)$410,000.
• D)$254,000.

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Definitions:

Cost Allocation

The process of identifying, accumulating, and assigning costs to cost objects, such as products, services, or departments.