The LaGrange Corporation had the following budgeted sales for the first half of the current year:

Cash Sales Credit Sales
January $60,000 $160,000
February $65,000 $180,000
March $50,000 $140,000
April $45,000 $130,000
May $55,000 $210,000
June $90,000 $240,000

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:

45% in month of sale
35% in month following sale
20% in second month following sale

The accounts receivable balance on January 1 of the current year was $85,000, of which $55,000 represents uncollected December sales and $30,000 represents uncollected November sales.

The total cash collected during January by LaGrange Corporation would be:_________

Question

Answered

Answer :

Zvikogo Zvikogo · Answer 1

Answer:

$168,250

Explanation:

Total Cash Collection would include cash collected from both Cash Sales and Credit Sales.

Summary for Calculation of January Cash Collected

Cash Sales $60,000

Credit Sales :

For January Sales ($160,000 × 45%) $72,000

For December Sales ($55,000 × 55%) $30,250

For November Sales ($30,000 × 20%) $6,000

Total Collection $168,250

Conclusion :

The total cash collected during January by LaGrange Corporation would be $168,250

Abiolataiwo2015go Abiolataiwo2015go · Answer 2

The total cash collected during January by LaGrange Corporation would be:$197,000.

Cash collected:

November receivables collections $30,000

December receivables collections $35,000

($55,000 × 35%/55%)

January cash sales $60,000

January credit sales collection $72,000

($160,000×45%)

Total collection $197,000

Inconclusion the total cash collected during January by LaGrange Corporation would be:$197,000.

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