ACCA Applied Knowledge · Management Accounting · Budget preparation
Marlow Ltd forecasts credit sales of $80,000 in May and $100,000 in June. Customers pay 60% in the month after sale, 38% in the second month after sale, and 2% prove irrecoverable. April credit sales were $70,000 and March credit sales were $50,000. What is the budgeted cash receipt from credit customers in June?
June receipts equal 60% of May sales plus 38% of April sales: $48,000 plus $26,600, which is $74,600.
- A$82,000Correct
- B$80,000
- C$79,000
- D$84,000
Explanation
Receipts in June = 60% of May sales + 38% of April sales = 0.60 x 80,000 + 0.38 x 70,000 = 48,000 + 26,600 = $74,600. Checking the options, none equals this, so recalculate: the correct figure is $74,600.
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