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Vitek1552 [10]
3 years ago
15

ABC Company expects the following sales and collection pattern for the last 4 months of the year. Month Cash Sales Credit Sales

Total Sales September $25,000 $65,000 $90,000 October $28,000 $72,000 $100,000 November $26,000 $68,000 $94,000 December $30,000 $71,000 $101,000 • 5% of credit sales are collected in the same month. • 65% of sales are collected in the following month. • 25% of sales are collected in the second following month. What are the projected cash collections for the month of December?
Business
1 answer:
Scrat [10]3 years ago
5 0

Answer:

<u>The projected cash collections for the month of December is $ 65,750. </u>

Explanation:

Projected cash flows for the month of December = 25% of october credit sales + 65% of November credit sales

5% of December credit sales

= (72000*25%) + (68000*65%) + (71000*5%)

= $ 65,750.

 Total percentage as per given question, is only 95% but not 100%.

Also, credit sales collections upto second following month of Actual date of sale. So, september month sale  is not considered.

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