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10 April, 13:06

A firm has projected sales in May, June, and July of $100, $200, and $300, respectively. The firm makes 20 percent of sales for cash and collects the balance one month following the sale. The firm's total cash receipts in July

a. are $200.

b. are $220.

c. are $180.

d. cannot be determined with the information provided.

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Answers (2)
  1. 10 April, 13:07
    0
    b. are $220.

    Explanation:

    Given that firm makes 20 percent of sales for cash and collects the balance one month following the sale. It means that cash collected in July will consist of 20% of the sales in the month of July and 80% of the sales in the previous month of June.

    As such, if projected sales in May, June, and July of $100, $200, and $300, respectively, the firm's total cash receipts in July

    = (20% * $300) + (80% * $200)

    = $60 + $160

    = $220
  2. 10 April, 13:30
    0
    B) are $220.

    Explanation:

    Month total sales 20% cash balance collection total

    May $100 $20 $0 $20

    June $200 $40 $80 $120

    July $300 $60 $160 $220

    The firm will collect 20% of its July sales = $60, and 80% of its June sales = $160, for a total of $220
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