ON 3 Not completePoints out of 15.00 Flg question Joy Manufacturing Company need

Question

ON 3 Not completePoints out of 15.00 Flg question Joy Manufacturing Company needs to know its anticipated cash inflows for the next quarter by month. Cash sales are 25 percent of total sales each month. Historically, sales on account have been collected as follows: 50 percent in the month of the sale. 30 percent in the month after the sale and the remaining 20 percent two months after the sale. Gross sales for the quarter are projected as follows: January February March $20,000 $10,000 $40,000 Accounts receivable on December 31 were $30.000. Joy's expected cash collections for March would be: Select one: O A. $37.000 OB. $30.250 O C. $32.000 O D. $47.200 Check

Explanation / Answer

Cash Collection in March = Cash Sales in March + Credit Collections

= $ 10,000 + $ 20,250

= $ 30,250

Hence the correct answer is B. $ 30,250

Note :

Collection Month Sales Cash Sales (25%) Credit Sales (75%) January February March January 20,000 5,000 15,000 7,500 4,500 3,000 February 10,000 2,500 7,500 3,750 2,250 March 40,000 10,000 30,000 15,000 20,250

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