Question
In: Accounting
limerick, Inc: has budgeted total sales for January, February, and March of $800,000, $900,000, and $950,000...
limerick, Inc: has budgeted total sales for January, February, and
March of $800,000, $900,000, and $950,000 respectively. Cash sales
are normally 25% of total sales. Of the credit sales, 40% are
collected in the same month as the sale, and 60% are collected
during the first month after the sale. Compute the amount of cash
received from sales during the month of February.
Solutions
Expert Solution
| Jan | Feb | March | |
| Sales | $ 800,000 | $ 900,000 | $ 950,000 |
| Cash sales | $ 200,000 | $ 225,000 | $ 237,500 |
| Credit Sales | $ 600,000 | $ 675,000 | $ 712,500 |
| Collection of credit sales | |||
| Jan | Feb | March | |
| Jan | $ 240,000 | $ 360,000 | |
| Feb | $ 270,000 | $ 405,000 | |
| March | $ 285,000 | ||
| Total Sales collected | $ 240,000 | $ 630,000 | $ 690,000 |
| amount of cash received from sales during the month of February ($225000+630000) | $ 855,000 |
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