Question

Pinewood Department Store reported the following information for 2020: October November December Budgeted sales $1,300,000 $1,600,000 $1,900,000 All sales are on credit. Customer amounts on account are collected 40% in the month of sale and 60% in the following month. How much cash will Pinewood receive in November

Answer 1

Answer:

$1,420,000

Explanation:

Total sales of October = $1,300,000. Collected in November = (60% of 1,300,000) = $780,000

November sales = $1,600,000. 40% sales of November = $640,000

Total cash collection = $780,000 + $760,000

Total cash collection = $1,420,000

So, the cash that Pinewood will receive in November is $1,420,000.