Answer:
Step-by-step explanation:
a) November sales = (Total Uncollected Sales - Uncollected Sales from December) / Collection rate after two months
= ($121,100 - $87,300) / 0.20
November sales = $169, 000.00
b) December sales = Uncollected sales from December / Collection rate of the previous month sales,
Therefore: December sales = $87,300 / 0.45 = $194,000
December sales = $194,000.00
c) Each month's collection for the company are:
Collections for ech month = 0.20(Sales from 2 months ago) + 0.25(Last month's sales) + 0.55 (Current sales)
January collections = 0.20($169000.00) + 0.25($194,000.00) + 0.55($132,000)
January collections = $154,900.00
February collections = 0.20($194,000.00) + 0.25($132,000) + 0.55($149,000)
February collections = $153,750.00
March collections = 0.20($132,000) + 0.25($149,000) + 0.55($164,000)
March collections = $153,850.00
