June sales were $30,000, while projected sales for July and August were $52,000 and $74,000, respectively. Sales are 60% cash and 40% credit. All credit sales are collected in the month following the sale. Calculate expected collections for July.

Sales on cash are generally collected immediately, hence if the sale occurs in June, it would be collected in June itself. Sales on credit on the other hand, is where the debtor can pay for the goods or services on a later date. In this case, it is paid in the next month after the sale.

According to the information cash collections are 60%. Hence in July, 60% of $52,000 would be obtained, which is - $52,000 x 60% = $31,200.

At the same time, the sales on credit made in June would be collected in July. Since sales on credit amount to 40% of total sales of the month, it would be - $30,000 x 40% = $12,000.

Total collections for July = $12,000 + $31,200 = $43,200.

tallinn tallinn · Answer 2 · 2022-04-05T14:26:49+02:00

"The Total collections for July is = $12,000 + $31,200 = $43,200. To understand more calculation check below".

Calculation of Collections of Sales

Sales on cash are generally collected immediately, thus, if the sale occurs in June, it would be collected in June itself. When the Sales on credit, on the different pointer, is where the debtor can pay for the goods or services at a later date. In case of, it is paid in the next month after the sale.

According to the information cash collections are 60%. Therefore, in July, 60% of $52,000 would be obtained, which is - $52,000 x 60% = $31,200.

At the same time, When the sales on credit made in June would be collected in July. When the sales on credit amount to 40% of total sales of the month, it would be - $30,000 x 40% = $12,000.

Therefore, the Total collections for July is = $12,000 + $31,200 = $43,200.

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