Assume that your credit sales for March was $12,764, for April was $27,406 and May was $28,706. If credit sales are collected 55% during the month of sale, 25% the month following the sale, and 15% in the second month following the sale, what is the total expected cash collections to be received in May? Round your answer to one dollar.

Question

Brooklyn Mclaughlin

Business

20 August, 02:52

Assume that your credit sales for March was $12,764, for April was $27,406 and May was $28,706. If credit sales are collected 55% during the month of sale, 25% the month following the sale, and 15% in the second month following the sale, what is the total expected cash collections to be received in May? Round your answer to one dollar.

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Answers (1)

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Blanche · Answer 1

Total expected cash collections for May are $24554

Explanation:

The May's cash collections will include collections from March's credit sales worth 15% of March's sales, collections for April's credit sales worth 25% of April's credit sales and collections worth 55% of t=May's credit sales. Thus the collections are,

Collection for March's sales = 12764 * 0.15 = $1914.6

Collection for April's sales = 27406 * 0.25 = $6851.5

Collection for May's sales = 28706 * 0.55 = $15788.3

Total expected cash collections for May = 1914.6 + 6851.5 + 15788.3

Total expected cash collections for May = $24554.4 rounded off to $24554