Oak Furniture provided the following information relevant to its sales for Decem

Question

Oak Furniture provided the following information relevant to its sales for December 2013 and the first quarter of 2014: Dec. 2013 Jan. 2014 Feb. 2014 (Actual) (Budgeted) (Budgeted) Credit sales $ 58,000 $ 138,000 $ 153,000 Cash sales $ 11,000 $ 23,000 $ 28,000 Based on the company's collection history, 4% of credit sales are uncollectible, 41% are collected in month of sale and the remainder collected in the following month. Cash collections in January from December 2013 credit sales would be: $34,220. How to get this answer of 34,220

Explanation / Answer

59% in the following month of sale ( Jan 2014)   58000*59%

32851.2

Cash collections in January from December 2013 credit sales would be: $34,220. How to get this answer of 34,220

This answer is possible only when credit sales of Dec 2013 would be collected

collection of credit Sales of dec 2013 to be collected in jan 2014 credit Sales of December 58000 Collectable sales(january 2015)

59% in the following month of sale ( Jan 2014)   58000*59%

34220 59% in the month of following sales (Jan 2014)

32851.2

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