ABC Company has projected Sales of $13181 in January. The sales are expected to grow by...

ABC Company has projected Sales of $13181 in January. The sales are expected to grow by 9% each month. ABC's collection schedule is as follows:

ABC collects 55 percent of its sales in the month of sale and the remainder is collected in the following month. What is the amount of the March cash collections?

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Expert Solution

Solution :

Solution:

As per the information given in the question we have

Projected Sales of January = $ 13,181

Sales for the further months after January are expected to Increase by 9 % .

Projected sales of February = ( Sales of January * 109 % )

= $ 13,181 * 109 % = $ 14,367.2900

Projected sales of March = ( Sales of February * 109 % )

= $ 14,367.2900 * 109 % = $ 15,660.3461

As per the information given in the question

The total cash collections of a given month = 55 % of sales made in the given month + 45 % of sales made in the month before i.e, the preceding month

Thus the total cash collections made in March = 55 % of sales made in the month of March + 45 % of sales made in Month of February

Hence the total of March cash collections = ( 55 % * $ 15,660.3461 ) + ( 45 % * 14,367.2900 )

= $ 8,613.1904 + $ 6,465.2805 = $ 15,078.4709

The amount of the March cash collections = $ 15,078.4709

jeff jeffy answered 7 months ago

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