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"BDL Ltd. is currently preparing its cash budget for the year to 31 March 20XX. An extract from its sales budget for the same year shows the following sales values.
"BDL Ltd. is currently preparing its cash budget for the year to 31 March 20XX. An extract from its sales budget for the same year shows the following sales values.
Rs
March 60,000
April 70,000
May 55,000
June 65,000
40% of its sales are expected to be for cash. Of its credit sales, 70% are expected to pay in month after sale and take a 2% discount. 27% are expected to pay in the second month after the sale, and the remaining 3% are expected to be bad debts. The value of sales budget to be shown in the cash budget for May 20XX is"
Answer & Solution
Correct Answer:
Option
A
40% of May sales for cash (40% x Rs. 55,000) = Rs.22,000
70% of April credit sales less 2% discount (70% x 60% x Rs. 70,000 x 98%) = Rs. 28,812
27% of March credit sales (27% x 60% x Rs. 60,000)
= Rs. 9,720
Total Sales = Rs. 22000 + Rs. 28812 + Rs. 9720 = Rs. 60,532.
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LoginMarch sales 60000*60%*27%=9720
April sales 70000*60%*70*-2%discount =28812
May sales 55000*40%=22000
Total cash 9720+28812+22000=60532 Ans.