Question

March, April, and May sales are $100,000, $120,000, and $125,000, respectively. A total of 80% of all sales are credit sales and 20% are cash sales. A total of 60% of credit sales are collected in the month of the sale and 40% are collected in the next month. There are no bad debt expenses. What is the amount of cash collections for April

Answer 1

Answer: C.

Cash collections for April include:

•40% of the May credit sales

•40% X 80% X $100,000 = $ 32,000

•all of the April cash sales

•20% X $120,000 = $ 24,000

•60% of the April credit sales

•60% X 80% X $120,000 = $ 57,600

$113,600

Explanation: hope this helps!!!!!