Question

Ruiz Co.’s budget includes the following credit sales for the current year: September, $165,000; October, $156,000; November, $140,000; December, $177,000. Credit sales are collected as follows: 15% in the month of sale, 55% in the first month after sale, and 30% in the second month after sale. How much cash can the company expect to collect in December as a result of current and past credit sales?

Answer 1

$150,350

Step-by-step explanation:

The computation of the cash collected in December is shown below:

Particulars Sept Oct Nov Dec

Sales $165,000 $156,000 $140,000 $177,000

Given percentage 30% 55% 15%

December collection amount $46,800 $77,000 $26,550

Total December collection $150,350