CPA · Question 07 · Area I: Business Analysis
Silverton Corp. is preparing its cash budget for April. The following information is available:<br/>- Sales: March (actual) $200,000; April (budgeted) $250,000.<br/>- 40% of sales are for cash; 60% are on credit.<br/>- Credit sales are collected: 50% in the month of sale, 40% in the following month, 10% uncollectible.<br/>- Purchases: March (actual) $120,000; April (budgeted) $150,000.<br/>- Purchases are paid: 70% in month of purchase, 30% in following month.<br/><br/>What are the total estimated cash collections and cash disbursements for April?
Answer options:
Collections: $223,000; Disbursements: $141,000
Collections: $235,000; Disbursements: $141,000
Collections: $223,000; Disbursements: $105,000
Collections: $175,000; Disbursements: $150,000
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