Question

#10

Sharon Corporation collects

10​%

in the second month following​ sale,

55​%

in the month following sale and

30​%

of a​ month's sales in the month of sale. The company has found that

55​%

of their sales are uncollectible. Budgeted sales for the upcoming four months​ are:

August budgeted sales	$$340,000
September budgeted sales	$ $310,000
October budgeted sales	$ $380,000
November budgeted sales	$ $230,000

The amount of cash that will be collected in November is budgeted to be

Answer 1

As provided Sales collections are as follows;

30% in the month of sale, 55% in the following month, 10% in the second following month and 5% is not collectible.

So for August sales, 30% will be collected in August, 55% in September, 10% in Octoebr and 5% shall not be collected. Basis this the below table is prepard.

Particulars	August	September	October	November
Sales	340,000	310,000	380,000	230,000
Collections
30% in the month of sale	102,000	93,000	114,000	69,000
55% in the following month	-	187,000	170,500	209,000
10% in the second following month			34,000	31,000
	102,000	280,000	318,500	309,000
Not collected
5% not collectible	17,000	15,500	19,000	11,500

Hence November cash collections shall be 309,000. (30% of Nov sales +55% of Oct sales + 10% of Sept sales)