Question

Flag As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000. The sales for January, February, and March of 2012 were as follows: $120,000, $140,000 and $150,000. 20% of each months sales are for cash. Of the remaining 80% (the credit sales), 60% are collected in the month of sale, with remaining 40% collected in the following month. What is the total cash collected (both from accounts receivable and for cash sales) in the month of february

Answer 1

Grackle Company

The total cash collected (both from accounts receivable and for cash sales) in the month of february is:

= $133,600.

Step-by-step explanation:

a) Data and Calculations:

January 1, Accounts receivables = $50,000

January 2012, Sales = $120,000

February 2012, Sales = $140,000

March 2012, Sales = $150,000

January February March

Sales $120,000 $140,000 $150,000

20% Cash Sales 24,000 28,000 30,000

80% Credit Sales 96,000 112,000 120,000

Cash Collections:

20% Cash Sales 24,000 28,000 30,000

60% month of sale 57,600 67,200 72,000

40% following month 50,000 38,400 44,800

Total collections $131,600 $133,600 $146,800