Question

Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business—September, October, and November—are $260,000, $375,000, and $400,000, respectively. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale. ​ The cash collections expected in October from accounts receivable are estimated to be Group of answer choices

Answer 1

Answer:

Total cash collection= $246,400

Explanation:

Giving the following information:

Sales:

September= $260,000

October= $375,000

The company expects to sell 30% of its merchandise for cash.

Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale. ​

Cash collection October:

Sales on account October= (375,000*0.7)*0.8= 210,000

Sales on account Septembre= (260,000*0.7)*0.2= 36,400

Total cash collection= $246,400