Question

In: Finance

Sales receipts.  California Cement Company anticipates the following​ fourth-quarter sales for​ 2014:   ​$1 comma 800 comma...

Sales receipts.  California Cement Company anticipates the following​ fourth-quarter sales for​ 2014:  

​$1 comma 800 comma 0001,800,000

​(October),

$ 1 comma 600 comma 000$1,600,000

​(November), and

​$2 comma 100 comma 0002,100,000

​(December). It posted the following sales figures for the third quarter of​ 2014:  

$ 1 comma 900 comma 000$1,900,000

​(July),

​$2 comma 050 comma 0002,050,000

​(August), and

​$2 comma 200 comma 0002,200,000

​(September). The company sells

90 %90%

of its products on​ credit, and

10 %10%

are cash sales. The company collects credit sales as​ follows:  

60 %60%

in the following​ month,

20 %20%

two months​ later, and

19 %19%

three months​ later, with

1 %1%

defaults. What are the anticipated cash inflows for the last quarter of​ 2014?

Given the July sales of

​$1 comma 900 comma 0001,900,000​,

The amount collected in July is

​$nothing.

​ (Round to the nearest​ dollar.)The amount collected in August is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in September is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in October is

​$nothing.

​(Round to the nearest​ dollar.)The amount not collected is

​$nothing.

​(Round to the nearest​ dollar.)Given the August sales of

​$2 comma 050 comma 0002,050,000​,

The amount collected in August is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in September is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in October is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in November is

​$nothing.

​(Round to the nearest​ dollar.)The amount not collected is

​$nothing.

​(Round to the nearest​ dollar.)Given the September sales of

​$2 comma 200 comma 0002,200,000​,

The amount collected in September is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in October is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in November is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in December is

​$nothing.

​(Round to the nearest​ dollar.)The amount not collected is

​$nothing.

​(Round to the nearest​ dollar.)Given the October sales of

​$1 comma 800 comma 0001,800,000​,

The amount collected in October is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in November is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in December is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in January is

​$nothing.

​(Round to the nearest​ dollar.)The amount not collected is

​$nothing.

​(Round to the nearest​ dollar.)Given the November sales of

​$1 comma 600 comma 0001,600,000​,

The amount collected in November is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in December is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in January is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in February is

​$nothing.

​(Round to the nearest​ dollar.)The amount not collected is

​$nothing.

​(Round to the nearest​ dollar.)Given the December sales of

​$2 comma 100 comma 0002,100,000​,

The amount collected in December is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in January is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in February is

​$nothing.

​(Round to the nearest​ dollar.)The amount collected in March is

​$nothing.

​(Round to the nearest​ dollar.)The amount not collected is

​$nothing.

​(Round to the nearest​ dollar.)The receipts for October are

​$nothing.

​(Round to the nearest​ dollar.)The receipts for November are

​$nothing.

​(Round to the nearest​ dollar.)The receipts for December are

​$nothing.

​(Round to the nearest​ dollar.)

Solutions

Expert Solution

Given the July sales of $1,900,000:

Amount collected in July = July’s cash sales
Amount collected in July = $190,000

Amount collected in August = 60% * July’s credit sales
Amount collected in August = 60% * $1,710,000
Amount collected in August = $1,026,000

Amount collected in September = 20% * July’s credit sales
Amount collected in September = 20% * $1,710,000
Amount collected in September = $342,000

Amount collected in October = 19% * July’s credit sales
Amount collected in October = 19% * $1,710,000
Amount collected in October = $324,900

Amount not collected = 1% * July’s credit sales
Amount not collected = 1% * $1,710,000
Amount not collected = $17,100

Given the August sales of $2,050,000:

Amount collected in August = August’s cash sales
Amount collected in August = $205,000

Amount collected in September = 60% * August’s credit sales
Amount collected in September = 60% * $1,845,000
Amount collected in September = $1,107,000

Amount collected in October = 20% * August’s credit sales
Amount collected in October = 20% * $1,845,000
Amount collected in October = $369,000

Amount collected in November = 19% * August’s credit sales
Amount collected in November = 19% * $1,845,000
Amount collected in November = $350,550

Amount not collected = 1% * August’s credit sales
Amount not collected = 1% * $1,845,000
Amount not collected = $18,450

Given the September sales of $2,200,000:

Amount collected in September = September’s cash sales
Amount collected in September = $220,000

Amount collected in October = 60% * September’s credit sales
Amount collected in October = 60% * $1,980,000
Amount collected in October = $1,188,000

Amount collected in November = 20% * September’s credit sales
Amount collected in November = 20% * $1,980,000
Amount collected in November = $396,000

Amount collected in December = ​19% * September’s credit sales
Amount collected in December = 19% * $1,980,000
Amount collected in December = $376,200

Amount not collected = 1% * September’s credit sales
Amount not collected = 1% * $1,980,000
Amount not collected = $19,800

Given the October sales of $1,800,000​:

Amount collected in October = October’s cash sales
Amount collected in October = $180,000

Amount collected in November = 60% * October’s credit sales
Amount collected in November = 60% * $1,620,000
Amount collected in November = $972,000

Amount collected in December = 20% * October’s credit sales
Amount collected in December = 20% * $1,620,000
Amount collected in December = $324,000

Amount collected in January = 19% * October’s credit sales
Amount collected in January = 19% * $1,620,000
Amount collected in January = $307,800

Amount not collected = 1% * October’s credit sales
Amount not collected = 1% * $1,620,000
Amount not collected = $16,200

Given the November sales of $1,600,000:

Amount collected in November = November’s cash sales
Amount collected in November = $160,000

Amount collected in December = 60% * November’s credit sales
Amount collected in December = 60% * $1,440,000
Amount collected in December = $864,000

Amount collected in January = 20% * November’s credit sales
Amount collected in January = 20% * $1,440,000
Amount collected in January = $288,000

Amount collected in February = 19% * November’s credit sales
Amount collected in February = 19% * $1,440,000
Amount collected in February = $273,600

Amount not collected = 1% * November’s credit sales
Amount not collected = 1% * $1,440,000
Amount not collected = $14,400

Given the December sales of $2,100,000​:

Amount collected in December = December’s cash sales
Amount collected in December = $210,000

Amount collected in January = 60% * December’s credit sales
Amount collected in January = 60% * $1,890,000
Amount collected in January = $1,134,000

Amount collected in February = 20% * December’s credit sales
Amount collected in February = 20% * $1,890,000
Amount collected in February = $378,000

Amount collected in March = 19% * December’s credit sales
Amount collected in March = 19% * $1,890,000
Amount collected in March = $359,100

Amount not collected = 1% * December’s credit sales
Amount not collected = 1% * $1,890,000
Amount not collected = $18,900

Receipts for October = $180,000 + $324,900 + $369,000 + $1,188,000
Receipts for October = $2,061,900

Receipts for November = $160,000 + $350,550 + $396,000 + $972,000
Receipts for November = $1,878,550

Receipts for December = $210,000 + $376,200 + $324,000 + $864,000
Receipts for December = $1,774,200

jeff jeffy answered 1 year ago
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