Question

Joiner Lumber has projected these monthly sales estimates: April $1,800 May $2,400 June $2,700 July $2,900 The firm collects 25 percent of its sales in the month of sale, 60 percent in the month following the month of sale, and another 14 percent in the second month following the month of sale. The firm never collects 1 percent of its sales. What is the amount of cash collections in July

Answer 1

Total cash collection= $2,681

Step-by-step explanation:

Giving the following information:

Sales:

April= $1,800

May= $2,400

June= $2,700

July= $2,900

The firm collects 25 percent of its sales in the month of sale, 60 percent in the month following the month of sale, and another 14 percent in the second month following the month of sale.

Cash collection July:

From July= (2,900*0.25)= 725

From June= (2,700*0.60)= 1,620

From May= (2,400*0.14)= 336

Total cash collection= $2,681