30% of the sales are credit sales, the remainder are cash sales. Credit sales ar

Question

30% of the sales are credit sales, the remainder are cash sales. Credit sales are collected 45% in the month of sale, 35% in the month following the sale, and 6% in the second month following the sale.

Compute Meredith Company’s cash receipts for June. (Do not round intermediate calculations.)

Compute Meredith Company’s cash receipts for July. (Do not round intermediate calculations.)

Compute Meredith Company’s cash receipts for August. (Do not round intermediate calculatio

Explanation / Answer

a) Cash receipts in june = (492000*70%+492000*30%*45%*466000*30%*35%+458000*30%*6%) = $467994

b) Cash receipts in july = (466000*30%*6%+492000*30%*35%+520000*70%+520000*30%*45%) = $494248

c) Cash receipt in august = (492000*30%*6%+520000*30%*35%+504000*70%+504000*30%*45%) = 484296

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