Make Some Noise Enterprises sells musical instruments. Projected sales are $890,

Question

Make Some Noise Enterprises sells musical instruments. Projected sales are $890,000 in October, $950,000 in November, $1,025,000 in December, and $920,000 in January. Noise's sales are 25% cash and 75% credit. Noise's collection history indicates that credit sales are collected as follows: 25% in the month of sale 65% in the month after the sale 8% two months after the sale 2% never collected The total expected cash collections in January are O A. $729,187.50 O B. $959,187.50 O C. $708,712.50 O D. $964,962.50 O E. $901,600.00

Explanation / Answer

Expected cash collections in January=230,000+(690,000*0.25)+(768750*0.65)+(0.08*712500)

=$959187.50

Cash sales(25%) Credit sales(75%) October 222500 667500 November 237500 712500 December 256250 768750 January 230,000 690,000

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