Question

A merchandising company's sales budget indicates the following sales: January: $30,000; February: $20,000; March: $15,000. The company expects 80% of the sales to be on account. Credit sales are collected 30% in the month of the sale and 70% in the month following the sale.
The total cash receipts collected during March will be $___.

Answer 1

Answer:

Total Cash receipts collected during March will be $17,800

Explanation:

Collection in March from:  

March Cash Sales                      [15000 x 20%]                 $3,000

February Credit sale              [$ 20000 x 80% x 70%] $11,200

March Credit sale                       [$ 15000 x 80% x 30%] $3,600

Total Cash receipts collected during March                 $17,800