Question

Q 22.14: The Eccleston Company has the following budgeted sales: January $40,000, February $60,000, and March $50,000. 40% of the sales are for cash and 60% are on credit. For the credit sales, 50% of the amount is collected in the month of sale, and 50% in the next month. The total expected cash receipts during March are

Answer 1

Total cash collection March= $53,000

Step-by-step explanation:

Giving the following information:

Sales:

February $60,000

March $50,000.

Sales in cash= 40%

Sales on account= 60% (50% of the amount is collected in the month of sale, and 50% in the next month)

We need to calculate the cash collection for March:

Cash collection March:

Sales on Cash March= (50,000*0.4)= 20,000

Sales on account March= (50,000*0.6)*0.5= 15,000

Sales on account February= (60,000*0.6)*0.5= 18,000

Total cash collection March= $53,000