Diely Company Has the Following Sales Budget Credit Sales Represent 80 Per Cent of Budgeted Sales

question 63

Multiple Choice

Diely Company has the following sales budget: $$\begin{array}{l}&\text { July }& \text { August }& \text { September }\\ \text { Budgeted Sales }&{ £ 105,000 }&{ £ 211,000 }&{ £ 134,000 }\end{array}$$ Credit sales represent 80 per cent of budgeted sales. Of the credit sales, 20 per cent is collected in the month of the sale, 60 per cent in the month after the sale, and the remaining 15 per cent is collected two months after the sale. Five per cent of all sales are uncollectible and written-off. Cash receipts from sales in September amounted to

• A)£169,150.
• B)£135,320.
• C)£107,200.
• D)£162,120.

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Definitions:

Variable Interest Entity (VIE)

A legal entity in which an investor holds a controlling interest that is not based on the majority of voting rights.

Intra-Entity Bonds

Bonds issued between different divisions or units within the same company, rather than to external investors.

Straight-Line Method

An accounting method of depreciation where an asset's cost is evenly distributed over its useful life.

Undervalued

A term referring to an asset or a company that is available for purchase at a price perceived to be below its inherent value.