Question

The following credit sales are budgeted by Garcia Company:January $255,000February $375,000March $525,000April $450,000The company's past experience indicated that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and *% in the second month following the sale. The anticipated cash inflow for the month of March is

Answer 1

Total cash to be realized in March = $468,000

Step-by-step explanation:

As for the provided information, the details are:

Realization of sales:

In the month of Sale = 70%

In the month following sale = 20%

In the next to month following sale = 10%

Thus, for the month of March: Realization shall be:

Sales of March = 70% = $525,000
`*`70% = $367,500

Sales of February = 20% = $375,000
`*` 20% = $75,000

Sales of January = 10% = $255,000
`*` 10% = $25,500

Total cash to be realized in March = $468,000