Fanatics Company is preparing monthly cash budgets for the first quarter of the year. Monthly sales revenue in this quarter is estimated as follow: January, $18,500; February, $16,000; March, $11,000. All sales are made on open credit with 70% collected in the month of sales and 30% collected in the following month. What is estimated cash collected in February and March

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11 December, 16:08

Fanatics Company is preparing monthly cash budgets for the first quarter of the year. Monthly sales revenue in this quarter is estimated as follow: January, $18,500; February, $16,000; March, $11,000. All sales are made on open credit with 70% collected in the month of sales and 30% collected in the following month. What is estimated cash collected in February and March

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Landon Harris · Answer 1

Instructions are below.

Explanation:

Giving the following information:

Sales:

January = $18,500

February = $16,000

March = $11,000.

All sales are made on open credit with 70% collected in the month of sales and 30% collected in the following month.

Cash collection = sales for the month*0.7 + cash from the month before

February:

From february = 16,000*0.7 = $11,200

From January = 18,500*0.3 = $5,550

Total = $16,750

March:

From March = 11,000*0.7 = $7,700

From February = 16,000*0.3 = $4,800

Total = $12,500