5) Alpha Company began operations on January 1. All sales are on credit. Alpha h

Question

5) Alpha Company began operations on January 1. All sales are on credit. Alpha has sales budgeted as $170,000 for February. Receivables at January 31 were $25,000. Accounts Receivable collections are expected to be 60% in the month of sale, 30% the next month, and 10% in the next. Use this information to determine the dollar value of: (Round & enter final answers to: the nearest whole dollar for total dollar answers, nearest penny for unit costs or nearest whole number for units)

            1. January Sales

            2. January Cash Collections from Customers

            3. February Expected Cash Collections from Customers

Explanation / Answer

Solution:-

1. January Sales:- $62,500

Explanation:-

$25,000 / 40% = $62,500.

2. January Cash Collections from Customers:- $37,500

Explanation:-

$62,500 * 60% = $37,500.

3. February Expected Cash Collections from Customers:- $120,750

Explanation:-

($62,500 * 30%) + ($170,000 * 60%) = $120,750.

Please Rate or comment if you have any doubt regarding this solution.

Related Questions

Navigate

• Browse (All)
• Browse 5
• Subjects

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