Hi, the question is incomplete, here is the complete exercise:
Camellia, a merchandising company, has provided the following extracts from their budget for the first quarter of the forthcoming year:
Jan Feb March
Sales (20% cash) $500,000 $750,000 $1,000,000
The company collects 70% of credit sales in the same month and the balance in the next month. Calculate the collections from the customers for the month of February.
A) $570,000
B) $540,000
C) $690,000
D) $750,000
Answer:
C) $690,000
Explanation:
Budget for cash sales in february:
$750,000 x 20% = $150,000
Budget for credit sales:
For february sales:
$750,000 x 80% x 70% = $420,000
For January sales:
$500,000x 80% x 30% = $120.000
Total Cash budget = $690,000
