Question

The Lumber Yard has projected sales for April through July of $152,400, $161,800, $189,700, and $196,400, respectively. The firm collects 52 percent of its sales in the month of sale, 46 percent in the month following the month of sale, and the remainder in the second month following the month of sale. What is the amount of the July collections?

Answer 1

Answer:

$192,626

Explanation:

The computation of the July month collection is shown below:

= July projected sales × collection percentage +  June projected sales × following month collection percentage + May projected sales × remaining percentage

= $196,400 × 52% + $189,700 × 46% + $161,800 × 2%

= $102,128 + $87,262 + $3,236

= $192,626

The percentage is 100% in which 52% is collected in July month 46% in June month and 2% is on May month