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13 votes
13 votes
Memphis Company anticipates total sales for April, May, and June of $910,000, $1,010,000, and $1,060,000 respectively. Cash sales are normally 20% of total sales. Of the credit sales, 40% are collected in the same month as the sale, 55% are collected during the first month after the sale, and the remaining 5% are not collected. Compute the amount of cash received from credit sales during the month of June.

A. $925,600.
B. $687,200.
C. $723,600.
D. $995,600.
E. $783,600.

User Fobus
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1 Answer

12 votes
12 votes

Answer:

E. $783,600.

Step-by-step explanation:

The computation of the amount of cash received from credit sales is shown below

Months Credit sales(80%)

April 728000

May 808000

June 848000

Now the amount of cash received is

= ($848,000 × 0.4) + ($808,000 × 0.55)

= $783,600

User Rarst
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2.7k points