Question

June sales were $40,000 while projected sales for July and August were $50,000 and $60,000, respectively. Sales are 40% cash and 60% credit. All credit sales are collected in the month following the sale. Calculate expected collections for July.

Select one:

A. $50,000
B. $54,000
C. $44,000
D. $36,000

Answer 1

C. $44,000

Explanation:

Projected sales;

June = $40,000

July = $50,000

August = $60,000

Sales are 40% cash and 60 % credit with credit sales collected in the month following the sale

Expected collection for July will include 40% sales in July and 60 % sales in June

Therefore,

Expected collection for July = (40% × $50,000) + (60% × $40,000)

= $20,000 + $24,000

= $44,000

The right option is C. $44,000.

Answer 2

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.