Reference no: EM132904099

Information pertaining to Yekstop Corp.'s sales revenue is presented below:

                          November                 December                 January

Cash sales             $97,000                   $126,000                $79,000

Credit sales           289,000                   451,000                 235,000

Total sales            $386,000                    $577,000               $314,000

Management estimates that 4% of credit sales are eventually uncollectible. Of the collectible credit sales, 60% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 70% of the sales projected for the month. All purchases of inventory are on open account; 20% will be paid in the month of purchase, and the remainder paid in the month following the month of purchase. Purchase costs are approximately 50% of the selling prices.

Problem 1: Total budgeted cash collections for Yekstop Corp. in December are:

Multiple Choice

Option 1: $454,870.
Option 2: $470,340.
Option 3: $523,240.
Option 4: $387,544.
Option 5: $496,752