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Tasty company began its operations on January 1 of the current year
Tasty company began its operations on January 1 of the current year. Budgeted sales for the 1st quarter are Php 240,000, Php 300,000 and Php 420,000, respectively for January, February, and March. Tasty Company expects 20% of its sales on cash and the remainder on account. Of the sales on account, 70% are expected to be collected in the month of sale, 25% in the month following the sale, and the remainder in the following month. How much should Tasty receive from sales in March?
Expert Solution
| month | January | February | March |
| Sales | 240000 | 300000 | 420000 |
| Cash sales (Sales * 20%) | 48000 | 60000 | 84000 |
| Credit (Sales * 80%) | 192000 | 240000 | 336000 |
|
70% of credit amount to be received in the same month (credit sales * 70%) |
134400 (192000*70%) |
168000 (240000*70%) |
235200 (336000*70%) |
| 25% of credit sales to be received in the following month |
48000 (192000*25%) |
60000 (240000*25%) |
84000 (336000*25%) |
| 5% of credit sales to be received in next month |
9600 (192000*5%) |
12000 (240000*5%) |
16800 (336000*5%) |
Amount received in January
48000+134400 = 182400
Amount in February
60000+168000+48000 = 276000
Amount in March
84000+235200+60000+9600 =388800
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