ExpertMedium2 marksShort Answer
ACCA · Question 25 · Budgeting
A construction company has the following budgeted sales:
January: $100,000
February: $120,000
March: $150,000
Sales are 40% cash and 60% credit. Credit customers pay in the month following the sale.
Calculate the total cash receipts budgeted for March. (Enter numbers only)
A construction company has the following budgeted sales:
January: $100,000
February: $120,000
March: $150,000
Sales are 40% cash and 60% credit. Credit customers pay in the month following the sale.
Calculate the total cash receipts budgeted for March. (Enter numbers only)
How to approach this question
1. Calculate March cash sales (40% of March sales). 2. Calculate March receipts from credit sales (60% of February sales). 3. Add them together.
Full Answer
Cash sales in March = 40% × $150,000 = $60,000.
Receipts from credit sales in March (from February sales) = 60% × $120,000 = $72,000.
Total cash receipts in March = $60,000 + $72,000 = $132,000.
Common mistakes
Taking 60% of March sales instead of February sales, or forgetting to include the cash sales portion.
Practice the full ACCA MA — Management Accounting Practice Exam 4
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