Refer to the Exhibit.
CM has produced the following budget information for next year:
The opening receivables balance represents 2 months sales. It is expected that the same level of sales will continue at an even rate throughout the year.
In an effort to improve receivables collection periods it is proposed to offer a discount of 5% for payment by cash. It is expected that 20% of customers will pay by cash. Of the remaining 80% credit sales, 40% will be settled within 1 month and 60% are expected to settle within 2 months.
What are the budgeted cash receipts from cash and credit sales in the year?
- $206,400
- $190,800
- $184,400
- $188,000