"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"

A. Rs. 60,532

B. Rs. 61,120

C. Rs. 66,532

D. Rs. 86,620

Answer: Option A

Solution(By Examveda Team)

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.