Reference: 20_02
Julia's Candy Co Cash Sales Are Normally 25% of Total Sales and All

question 54

Multiple Choice

Reference: 20_02
Julia's Candy Co. reports the following information from its sales account and sales budget:
$\begin{array}{llr}\text { Sales } & \text { May } & \$ 105,000 \\& \text { June } & 93,000 \\& & \\\text { Expected } & \text { July } & \$ 90,000 \\\text { Sales: } & & \\& \text { August } & 110,000 \\& \text { September } & 120,000\end{array}$
Cash sales are normally 25% of total sales and all credit sales are expected to be collected in the month following the date of sale.
-Based on the information from Julia's,the total amount of cash expected to be received from customers in July is:

• A) $69,750
• B) $90,000
• C) $92,250
• D) $22,500
• E) $115,500

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Definitions:

Financing Activity

Activities that result in changes in the size and composition of the equity and borrowings of a company.

Operating Activity

Business actions that are directly related to the production and delivery of goods and services, which are reflected in the income statement.

Investing Activity

This refers to transactions involving the acquisition and disposal of long-term assets and other investments not included in cash equivalents.

Statement of Cash Flows

A financial report detailing the impact of alterations in balance sheet figures and income on cash and cash equivalents, dividing the cash flows into categories of operating, investing, and financing activities.