Question

Cash collections for Renew Lights found that 65% of sales were collected in the month of sale, 25% was collected the month after the sale, and 10% was collected the second month after the sale. Given the sales shown, how much cash will be collected in March and April?

a. $24,000
b. $35,000
c. $28,000
d. $21,000

Answer 1

To calculate the cash collections in March and April, multiply the sales by the corresponding percentages. Add the resulting amounts to find the total cash collected in the two months. None of the given options is correct.

Step-by-step explanation:

To calculate the cash collections in March and April, we need to consider the percentages provided. Let's assume the total sales for the two months are $100,000.

In the month of sale (March), 65% of the sales are collected, so 65% of $100,000 is $65,000.

In the month after the sale (April), 25% of the sales are collected, so 25% of $100,000 is $25,000.

The total cash collected in March and April would be $65,000 + $25,000 = $90,000. Therefore, none of the given options ($24,000, $35,000, $28,000, $21,000) is correct.