Information pertaining to Brenton Corporation's sales revenue is presented in the following table: ...
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Accounting
Information pertaining to Brenton Corporation's sales revenue is presented in the following table:
February
March
April
Cash Sales
$160,000
$150,000
$120,000
Credit Sales
300,000
400,000
280,000
Total Sales
$460,000
$550,000
400,000
Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 75% are collected in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month is 80% of the next month's projected total sales. All purchases of inventory are on account; 50% are paid in the month of purchase, and the remainder is paid in the month following the purchase. Brenton's budgeted total cash payments in March for inventory purchases are (Points : 5)
$385,000. $505,000. $306,250. $280,000.
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