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11 December, 14:59

EA10.

LO 7.3Nonna’s Re-Appliance Store collects 55% of its accounts receivable in the month of sale and 40% in the month after the sale. Given the following sales, how much cash will be collected in February?

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  1. 11 December, 15:27
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    (As sales data is missing in question lets assume that sales made in January is 100,000 dollars and in February is 150,000 dollars. It is assumed that 5% of sales remain uncollected)

    Cash collected in February amounts to $ 122,500

    Explanation:

    To calculatethe amount of cash received in the month of february two thing will be taken in consideration that is 40% of January sales and 55% of february sales.

    Feb Cash

    40% of Jan sales = 100,000 * 40% = $ 40,000

    55% of Feb sales = 150,000 * 55% = $ 82,500

    Total Cash = $ 122,500
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