Question

Kaspar Industries expects credit sales for January, February, and March to be $203,400, $267,600, and $317,300, respectively. It is expected that 75% of the sales will be collected in the month of sale, and 25% will be collected in the following month. Compute cash collections from customers for each month.

Answer 1

January = $152,550

February = $251,550

March = $304,875

Step-by-step explanation:

To Compute cash collections from customers follow the given collection history closely :

Month`s receipts = Cash Collected in Month of Sale (75%) + Cash Collected in Month After Sale

Cash Collection Schedule

Month January February March

In Month of Sales $152,550 $200,700 $237,975

Month After Sale $0 $50,850 $66,900

Total $152,550 $251,550 $304,875