Dougan Paint and Supply Sells Exclusively to Building Contractors on a Credit

Multiple Choice

Dougan Paint and Supply sells exclusively to building contractors on a credit basis. The company collects 75% of its credit sales in the month of sale and the remaining 25% in the month following sale. April's actual sales totaled $32,500 and the sales budget forecasts sales of $55,000 for May and another $60,000 for June. What amount of cash receipts will Dougan budget from May and June sales respectively?

A) $55,000 from May and $60,000 for June.
B) $41,250 from May and $45,000 for June.
C) $13,750 from May and $15,000 for June.
D) $49,375 from May and $58,750 for June.*