Morgan Company’s budgeted income statement reflects the following amounts:

Morgan Company’s budgeted income statement reflects the following amounts:

 SalesPurchasesExpensesJanuary$119,000 $77,000 $23,900 February 109,000  65,000  24,100 March 124,000  80,250  26,900 April 129,000  83,500  28,500 

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

Morgan 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$87,000 Accounts receivable* 57,000 Accounts payable 71,000 

*Of this balance, $22,800 will be collected in January and the remaining amount will be collected in February.

The monthly expense figures include $4,900 of depreciation. The expenses are paid in the month incurred.

Morgan’s budgeted cash receipts in February are:

Multiple Choice

  • $82,300.
  • $112,500.
  • $111,590.
  • $78,300.
  • $112,140.

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