It is January 1 of Year 2. Sales for Harry Company for January, February, and Ma
ID: 2470016 • Letter: I
Question
It is January 1 of Year 2. Sales for Harry Company for January, February, and March are forecasted to be as follows: January, $200,000; February $400,000; March, $500,000. ALL sales are credit sales. Of these credit sales, 10% are collected during the month of sale, 30% in the following month, and 60% in the second following month. TOTAL sales for November and December of Year 1 were $200,000 and $400,000, respectively.
What is the forecasted amount of total CASH COLLECTIONS FROM SALES in March?
$310,000
$270,000
$300,000
$280,000
$290,000
$310,000
$270,000
$300,000
$280,000
$290,000
Explanation / Answer
Answer:
Total CASH COLLECTIONS FROM SALES in March = $290,000
Working & calculation as follows:
Particulars November December January February March Forecased Sale (Credit Sales) $200,000 $400,000 $200,000 $400,000 $500,000 Collection - 10% of Sales are collected during the month of sale $20,000 $40,000 $20,000 $40,000 $50,000 - 30% of Sales are collected in the following month $60,000 $120,000 $60,000 $120,000 - 60% of Sales are collected in the second following month $120,000 $240,000 $120,000 Total Collection $20,000 $100,000 $260,000 $340,000 $290,000Related Questions
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