Question

Kaspar Industries expects credit sales for January, February, and March to be $202,100, $264,200, and $319,300, respectively. It is expected that 75% of the sales will be collected in the month of sale, and 25% will be collected in the following month. Compute cash collections from customers for each month.

Answer 1

Collection per month:

January $ 151,575

February: $ 248,675

March: $ 305,525

Step-by-step explanation:

January:

202,100 x 75% = 151,575

February:

264,200 x 75% = 198,150 current month

202,100 x 25% = 50,525 previous month

Total 248,675

March:

319,300x 75% = 239,475 current month

264,200 x 25% = 66,050 previous month

Total 305,525