Question

12. Finmin Company has the following sales budget for the last six months of 2015: July $200,000 October $180,000 August 160,000 November 200,000 September 200,000 December 180,000 Sales are immediately due, however the cash collection of sales, historically, has been as follows: 65% of sales collected in the month of sale, 25% of sales collected in the month following the sale, 8% of sales collected in the second month following the sale, and 2% of sales are uncollectible. Cash collections for September are ________. a. $143,000 b. $170,000 c. $186,000 d. $204,000

Answer 1

c) $186,000

Step-by-step explanation:

Cash collection for September

Month of sales : $

65%× September sales = 65% × 200,000 = 130,000

One Month following sales:

25% × August sales = 25% × 160,000 = 40,000

Two Months following sales:

8% × July sales = 8% × 200,000= 16,000.

186,000