Question

Kaspar Industries expects credit sales for January, February, and March to be $208,800, $261,600, and $320,800, 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= $208,800

February= $261,600

March= $320,800

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= (208,800*0.75)= 156,600

Total cash collection= $156,600

Cash collection February:

Sales on credit from February= (261,600*0.75)= 196,200

Sales on credit from January= (208,800*0.25)= 52,200

Total cash collection= $248,400

Cash collection March:

Sales on credit from March= (320,800*0.75)= 240,600

Sales on credit from February= (261,600*0.25)= 65,400

Total cash collection= $306,000