Answered

Engage with knowledgeable experts and get accurate answers on IDNLearn.com. Find the solutions you need quickly and accurately with help from our knowledgeable community.

Justin Company's budget includes the following credit sales for the current year: September, $25,000; October, $36,000; November, $30,000; December, $32,000. Credit sales are collected as follows: 15% in the month of sale, 60% in the first month after sale, 20% in the second month after sale, and 5% is uncollectible. How much cash can Justin expect to collect in November as a result of current and past credit sales

Sagot :

Abiolataiwo2015idn

Answer:

$31,100

Explanation:

Calculation to determine How much cash can Justin expect to collect in November as a result of current and past credit sales

First step is to calculate November sales

November sales =(15% × $30,000)

November sales=$4,500

Second step is to calculate October sales

October sales= (60% × $36,000)

October sales=$21,600

Third step is to calculate September sales

September sales=(20% × $25,000)

September sales=$5,000

Now let calculate the Total cash receipts using this formula

Total cash receipts=September sales+October sales+November sales

Let plug in the formula

Total cash receipts=$4,500+$21,600+$5,000

Total cash receipts=$31,100

Therefore the amount of cash that Justin can expect to collect in November as a result of current and past credit sales is $31,100

Thank you for participating in our discussion. We value every contribution. Keep sharing knowledge and helping others find the answers they need. Let's create a dynamic and informative learning environment together. Your search for answers ends at IDNLearn.com. Thank you for visiting, and we hope to assist you again soon.