Reference no: EM132502134

The Gingham Company's budgeted income statement reflects the following amounts:

                                       Sales                     Purchases                        Expenses

January                   $113,000                      $ 71,000                   $ 23,300

February              103,000                          59,000                           23,500

March                     118,000                           74,250                     26,300

April                            123,000                             77,500                        27,900

Sales are collected 50% in the month of sale, 20% in the month following sale, and 29% in the second month following sale. 1 percent of sales is uncollectible and expensed at the end of the year.

Gingham pays for all purchases in the month following purchase and takes advantage of a 1% discount. The following balances are as of January 1:

Cash                                    $ 81,000

Accounts receivable                   51,000

Accounts payable                            65,000

Of this balance, $20,400 will be collected in January and the remaining amount will be collected in February. The monthly expense figures include $4,300 of depreciation. The expenses are paid in the month incurred.

Question 1: Gingham's budgeted cash receipts in February are:

Group of answer choices

1. 74,100
2. 78,100
3. 103,790
4. 104,340
5. 104,700