The Following Credit Sales Are Budgeted by Terra Co The Company's Past Experience Indicates That 70% of the Accounts

question 34

Multiple Choice

The following credit sales are budgeted by Terra Co.: $$\begin{array} { l r } \text { January } & \$ 204,000 \\\text { February } & 300,000 \\\text { March } & 420,000 \\\text { April } & 360,000\end{array}$$ The company's past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale.The anticipated cash inflow for the month of April is

• A)$370,320.
• B)$336,000.
• C)$360,000.
• D)$352,800.

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Definitions:

Fiscal Policy

Government policies concerning taxation and spending to influence economic conditions, including aggregate demand.

Crowding Out

A situation where increased public sector spending leads to a reduction in private sector spending, which can dampen or negate the intended stimulative effect of the government's expenditures.

Investment Spending

Expenditure on capital goods including buildings, machinery, and equipment, which is intended to increase future production.

Aggregate Expenditure

The total amount spent on goods and services in an economy at a particular time.