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28 August, 11:34

Assume that your credit sales for March was $12,764, for April was $27,406 and May was $28,706. If credit sales are collected 55% during the month of sale, 25% the month following the sale, and 15% in the second month following the sale, what is the total expected cash collections to be received in May? Round your answer to one dollar.

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  1. 28 August, 15:04
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    Total expected cash collections for May are $24554

    Explanation:

    The May's cash collections will include collections from March's credit sales worth 15% of March's sales, collections for April's credit sales worth 25% of April's credit sales and collections worth 55% of t=May's credit sales. Thus the collections are,

    Collection for March's sales = 12764 * 0.15 = $1914.6

    Collection for April's sales = 27406 * 0.25 = $6851.5

    Collection for May's sales = 28706 * 0.55 = $15788.3

    Total expected cash collections for May = 1914.6 + 6851.5 + 15788.3

    Total expected cash collections for May = $24554.4 rounded off to $24554
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