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The following figures have been taken from the budget of a company called Herts & Ford International Services Ltd, in the retail trade for the year ended 31 December 2021 January February March April Sales (units) 10,000 11,000 12,000 10,000 The following information is available: (i) The selling price per unit is E9 It will increase to E9.50 per unit from April and in subsequent months. 25% of budgeted sales revenue is expected to be received in the month of sale. 70% of budgeted sales in the following month, while 5% of budgeted sales are expected to result in bad debts. (ii) The budgeted number of units in inventory at the end of each month is equal to the budgeted sales for the following month. (iii) The business is seasonal, and, as indicated in the above budget.results in April are expected to be similar to those in January. There is a three-month cycle, so the results in May and June are expected to be similar to those in February and March respectively. Select the correct answer from the drop down list What is the total amount of cash collected in the month of March?

Question

The following figures have been taken from the budget of a company called Herts & Ford International
Services Ltd, in the retail trade for the year ended 31 December 2021
January February March	April
Sales (units)	10,000 11,000	12,000	10,000
The following information is available:
(i) The selling price per unit is E9 It will increase to E9.50 per unit from April and in subsequent months.
25%  of budgeted sales revenue is expected to be received in the month of sale. 70%  of budgeted sales in
the following month, while 5%  of budgeted sales are expected to result in bad debts.
(ii) The budgeted number of units in inventory at the end of each month is equal to the budgeted sales for
the following month.
(iii) The business is seasonal, and, as indicated in the above budget.results in April are expected to be
similar to those in January. There is a three-month cycle, so the results in May and June are expected to
be similar to those in February and March respectively.
Select the correct answer from the drop down list
What is the total amount of cash collected in the month of March?

The following figures have been taken from the budget of a company called Herts & Ford International Services Ltd, in the retail trade for the year ended 31 December 2021 January February March April Sales (units) 10,000 11,000 12,000 10,000 The following information is available: (i) The selling price per unit is E9 It will increase to E9.50 per unit from April and in subsequent months. 25% of budgeted sales revenue is expected to be received in the month of sale. 70% of budgeted sales in the following month, while 5% of budgeted sales are expected to result in bad debts. (ii) The budgeted number of units in inventory at the end of each month is equal to the budgeted sales for the following month. (iii) The business is seasonal, and, as indicated in the above budget.results in April are expected to be similar to those in January. There is a three-month cycle, so the results in May and June are expected to be similar to those in February and March respectively. Select the correct answer from the drop down list What is the total amount of cash collected in the month of March?

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JudeMaster · Tutor for 5 years

Answer

Let's execute these equations for our answer.<br /><br />In step 1, compile Model Sales Revenues,<br /><br />For January, \(Sales\, Revenue = 10,000 \times £ 9 = £ 90,000\)<br /><br />For February, \(Sales\, Revenue = 11,000 \times £ 9 = £ 99,000\)<br /><br />For March, \(Sales\, Revenue = 12,000 \times £ 9 = £ 108,000\)<br /><br />For April, \(Sales\, Revenue = 10,000 \times £ 9.50 = £ 95,000\)<br /><br />From Step 2, For Additives due in March,<br /><br />\(March\, cash\,collections = 25\% \,of \,March\, sales + 70\% \,of\, February\, sales + 5\% \,of\, January\, sales\)<br /><br />By substituting based on UK Lending Value terms calculated previously,<br /><br />= 0.25 * £108,000(March sales) + .70 * £99,000(February sales) + 0.05 * £90,000(January sales)<br /><br />= £27,000 + £69,300 + £4,500<br /><br />= £100,800 (total amount)

Explain

## Step 1: <br />Calculate the sales revenue for each month. In this scenario, the cost of each unit in January through March is £9. Then increase the unit cost to £9.50 from April.<br /><br />### \(\boldsymbol{Sales\, Revenue = Sales\, units \times Price\, per\, unit}\)<br /><br />## Step 2: <br />Next curiosity would be to find out the Cash Collections for March which is the sum of 25% of March sales, 70% of February sales returning from bad Finance, and 5% of January sales<br /><br />### \(\boldsymbol{Cash\, Collections = 25\% \,of\, March Sales \% + 70\% \,of\, February Sales + 5\% \,of\, January Sales}\)<br /><br />## Step 3:<br />Complete the transmission, and that's our Sequence.
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