The LaGrange Company Had the Following Budgeted Sales for the First

question 127

Multiple Choice

The LaGrange Company had the following budgeted sales for the first half of the current year: $\begin{array} { |l | r | r | } \hline & \text { Cash Sales } & \text { Credit Sales } \\\hline \text { January } & \$ 70,000 & \$ 340,000 \\\hline \text { February } & 50,000 & 190,000 \\\hline \text { March } & 40,000 & 135,000 \\\hline \text { April } & 35,000 & 120,000 \\\hline \text { May } & 45,000 & 160,000 \\\hline \text { June } & 40,000 & 140,000 \\\hline\end{array}$ 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 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.

-What would be the total cash collected by LaGrange Company during January?

• A) $261,500.
• B) $331,500.
• C) $344,000.
• D) $274,000.

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