Question

Ruiz Co.'s budget includes the following credit sales for the current year: September, $145,000; October, $136,000; November, $120,000; December, $157,000. Credit sales are collected as follows: 15% in the month of sale, 50% in the first month after sale, and 35% in the second month after sale. How much cash can the company expect to collect in December as a result of current and past credit sales

Answer 1

Answer:

The total collection in December is "131150".

Explanation:

The given values are:

Credit sales,

• September: $145,000
• October: $136,000
• November: $120,000
• December: $157,000

Now,

Credit sales in December will be:

= $157,000\times 15 \ percent$

= $157000\times 0.15$

= $23550$

Credit sales in November will be:

= $120000\times 50 \ percent$

= $120000\times 0.5$

= $600000$

Credit sales in October will be:

= $136000\times 35 \ percent$

= $136000\times 0.35$

= $47600$

hence,

The total collection will be:

= $23550+60000+47600$

= $131150$