Question

Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $232,000, $319,000, and $411,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale and 30% in the month following the sale. The cash collections in November are

Answer 1

Answer:

Total cash collection= $322,425

Explanation:

Giving the following information:

Sales:

Septmeber= $232,000

October= $319,000

November= $411,000

The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale and 30% in the month following the sale.

We need to determine the cash collection for November:

Cash Collection:

Sales in Cash November= 411,000*0.25= 102,750

Sales on Account October= (319,000*0.75)*0.7= 167,475

Sales on Account September= (232,000*0.75)*0.3= 52,200

Total cash collection= $322,425