Question

Ruiz Co.’s budget includes the following credit sales for the current year: September, $165,000; October, $156,000; November, $140,000; December, $177,000. Credit sales are collected as follows: 15% in the month of sale, 55% in the first month after sale, and 30% in the second month after sale. How much cash can the company expect to collect in December as a result of current and past credit sales?

Answer 1

Answer:

$150,350

Explanation:

The computation of the cash collected in December is shown below:

Particulars          Sept          Oct           Nov           Dec

Sales                 $165,000      $156,000       $140,000        $177,000

Given percentage                        30%                 55%                 15%                      

December collection amount   $46,800          $77,000           $26,550

Total December collection                    $150,350