The Following Information Pertains to the January Operating Budget for Casey

question 99

Multiple Choice

The following information pertains to the January operating budget for Casey Corporation.
-Budgeted sales for January $201,000 and February $101,000.
-Collections for sales are 40% in the month of sale and 60% the next month.
-Gross margin is 25% of sales.
-Administrative costs are $13,000 each month.
-Beginning accounts receivable is $25,000.
-Beginning inventory is $17,000.
-Beginning accounts payable is $73,000. (All from inventory purchases.)
-Purchases are paid in full the following month.
-Desired ending inventory is 25% of next month's cost of goods sold (COGS) .
For January, budgeted cash collections are ________.

• A) $201,000
• B) $105,400
• C) $80,400
• D) $25,000

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Definitions:

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