Question

Page Company makes 30% of its sales for cash and 70% on account. 60% of the credit sales are collected in the month of sale, 25% in the month following sale, and 12% in the second month following sale. The remainder is uncollectible. The following information has been gathered for the current year: Month 1 2 3 4 Total sales $60,000 $70,000 $50,000 $30,000 Total cash receipts in Month 4 will be:

Answer 1

$36,230

Step-by-step explanation:

Month 1 Month 2 Month 3 Month 4

60,000 70,000 50,000 30,000

Calculation for receipts in Month 4:

9000 30% cash in the same month(30000*30%)

12600 60% credit in the same month (30000*70%*60%

8750 25% in month following sales (50000*70%*25%)

5880 12% second month following sales (70000*70%*12%)

36,230

I hope I made myself clear buddy.

Best of Luck.