Answer:
Getty’s cash receipts for the months of February: $225,900
Getty’s cash receipts for the months of March: $281,620
Explanation:
Cash sales:
In January = 35% x $200,000 = $70,000
In February = 35% x $235,000 = $82,250
In March = 35% x $298,000 = $104,300
Credit Sales:
In January = 65% x $200,000 = $130,000
In February = 65% x $235,000 = $152,750
In March = 65% x $298,000 = $193,700
Getty’s cash receipts for the months of February = Cash sales of February + 40% x Credit sales of January + 60% x Credit sales of February = $82,250 + 40% x $130,000 + 60% x $152,750 = $225,900
Getty’s cash receipts for the months of March = Cash sales of March + 40% x Credit sales of February + 60% x Credit sales of March = $104,300 + 40% x $152,750 + 60% x $193,700 = $281,620
