Question

Brief Exercise 22-09 Kaspar Industries expects credit sales for January, February, and March to be $211,000, $270,600, and $315,300, respectively. It is expected that 75% of the sales will be collected in the month of sale, and 25% will be collected in the following month. Compute cash collections from customers for each month.

Answer 1

Answer:

Results are below.

Explanation:

Giving the following information:

Credit sales:

January= $211,000

February= $270,600

March= $315,300

It is expected that 75% of the sales will be collected in the month of sale, and 25% will be collected in the following month.

Cash collection January:

Sales on credit from January= (211,000*0.75)= 158,250

Total cash collection= $158,250

Cash collection February:

Sales on credit from February= (270,600*0.75)= 202,950

Sales on credit from January= (211,000*0.25)= 52,750

Total cash collection= $255,700

Cash collection March:

Sales on credit from March= (315,300*0.75)= 236,475

Sales on credit from February= (270,600*0.25)= 67,650

Total cash collection= $304,125