Boone Co's Sales, Based on Past Experience, Are 20% Cash and and 80

Boone Co.'s sales, based on past experience, are 20% cash and 80% credit. Credit sales are typically collected as follows: 40% in the month of sale, 50% in the month after the sale, and 10% in the second month following month of sale. On December 31, the accounts receivable balance is $54,000, of which $12,000 is from November sales. Total sales for January and February are budgeted to be $100,000 and $120,000, respectively.

What are Boone Co.'s budgeted cash receipts for January?

A) $74,200.
B) $85,000.
C) $87,000.
D) $94,200.
E) $99,000.

Correct Answer:

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