2. Mercer, Inc. had the following sales for the past six months. Mercer collects

Question

2. Mercer, Inc. had the following sales for the past six months. Mercer collects its credit sales 30% in the month of sale, 60% one month after the sale, and 10% two months after the sale.

What are Mercer's total cash receipts for the month of March?  (Please show step by step how you got to your answer)

                             Cash Sales      Credit Sales

January              $50,000             $50,000

February             $70,000             $110,000

March                  $55,000             $95,000

April                     $78,000             $130,000

May                      $80,000             $105,000

June                       $75,000          $148,000

Explanation / Answer

Cash receipts in the month of March Particulars Computation Amount Cash Sales in March NA 55000 Credit sales in march 30% of 95000 collected in March 28500 Credit sales in february 60% of 110000 collected in March 66000 Credit sales in january 10% of 50000 collected in March 5000 Total Cash Receipts in March 154500

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