The management of Ocean Industries estimates that credit sales for August, Septe

Question

The management of Ocean Industries estimates that credit sales for August, September, October, and November will be $540,000, $750,000, $840,000, and $480,000, respectively. Experience has shown that collections are made as follows:

            In month of sale                                       25%

            In first month after sale                            60%

            In second month after sale                      10%

Instructions

Determine the collections from customers in October. Show all computations to be submitted.

None of these will work.

$714,000.

$825,000.

$614,000.

$816,000.

Need Help to Sove this !

None of these will work.

$714,000.

$825,000.

$614,000.

$816,000.

Explanation / Answer

Answer is $ 714,000 as calculated below:

Ocean Industries Collections from customer in October August September October November Credit Sales $   5,40,000 $    7,50,000 $   8,40,000 $ 4,80,000 Collections: In the month -25% $ 840,000 x 25% $   2,10,000 Prvious months sale-60% $ 750,000 x 60% $   4,50,000 month Immediately preceeding to previous month-10% $ 540,000 x 10% $      54,000 Total collections in October month $   7,14,000

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.