Question

Thornton, Inc. has budgeted sales for the months of September and October at $ 304 comma 000 and $ 282 comma 000​, respectively. Monthly sales are 20​% credit and 80​% cash. Of the credit​ sales, 50​% are collected in the month of​ sale, and 50​% are collected in the following month. Calculate cash collections for the month of October. A. $ 253 comma 800 B. $ 284 comma 200 C. $ 301 comma 800 D. $ 273 comma 600

Answer 1

Answer:

$284,200

Explanation:

The computation of cash collections is shown below:-

Cash sales of October =  $282,000 × 80%

= $225,600

Credit sales collection

September = ($304,000 × 20%) × 50%

= $30,400

October = $282,000 × 20% × 50%

= $28,200

Total cash collections for the month of October = Cash sales of October + Credit sales collection of September + Credit sales collection of October

= $225,600 + $30,400 + $28,200

= $284,200