Jack Co. reported the following information for 2014: October November December
ID: 2445678 • Letter: J
Question
Jack Co. reported the following information for 2014:
October November December
Budgeted sales $460,000 $540,000 $440,000
Budgeted purchases $240,000 $256,000 $288,000
• All sales are on credit. • Customer amounts on account are collected 50% in the month of sale and 50% in the following month. • Cost of goods sold is 35% of sales. • Jack purchases and pays for merchandise 70% in the month of acquisition and 30% in the following month. • Accounts payable is used only for inventory acquisitions. How much cash will Jack receive during November? (Answer: $500,000)
Explanation / Answer
Answer
Jack will receive $500,000 during November month from Debtors in relation to credit sales made to them.
Working related to Collection from Debtors Particulars October November December Budgeted Sales $460,000 $540,000 $440,000 50% Amounts are collected in the month $230,000 $270,000 $220,000 50% Amounts are collected in next month - $230,000 $270,000 Total Collection $230,000 $500,000 $490,000Related Questions
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