Question

Two Brothers Moving prepared the following sales​ budget: Month Cash Sales Credit Sales March $ 19 comma 000 $ 5 comma 000 April $ 40 comma 000 $ 20 comma 000 May $ 38 comma 000 $ 39 comma 000 June $ 51 comma 000 $ 48 comma 000 Credit collections are 10​% in the month of​ sale, 65​% in the month following the​ sale, and 20​% two months following the sale. The remaining 5​% is expected to be uncollectible. What are the total cash collections in May at Two Brothers​ Moving?

Answer 1

Answer:

The total cash collections in May at Two Brothers​ Moving is projected to be at $17,900.

Explanation:

Please find the below for detailed explanation and calculations:

The May cash collection of Two Brothers Moving is budgeted to include the following collection from credit sales:

10% of Credit Sales in May + 65% of Credit Sales in April + 20% of Credit Sales in March = 10% x $39,000 + 65% x $20,000 + 20% x $5,000 = $17,900.

As a result, the total cash collections in May of Two Brothers Moving is projected at $17,900.