As of January 1 of the current year, the Edwards Company had accounts receivable of $50,000. The sales for January, February, and March were as follows: $100,000, $150,000, and $180,000. 20% of each month's sales are for cash. Of the remaining 80% (the credit sales), 70% are collected in the month of sale, with the remaining 30% collected in the following month. What is the total cash collected (both from accounts receivable and for cash sales) in the month of March?

Question

Nathanael Garrison

Business

1 October, 14:21

As of January 1 of the current year, the Edwards Company had accounts receivable of $50,000. The sales for January, February, and March were as follows: $100,000, $150,000, and $180,000. 20% of each month's sales are for cash. Of the remaining 80% (the credit sales), 70% are collected in the month of sale, with the remaining 30% collected in the following month. What is the total cash collected (both from accounts receivable and for cash sales) in the month of March?

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Isis Levine · Answer 1

Total cash colected in March $172,800

Explanation:

March collections:

March cash sales 180,000 x 20% $36,000

March credit sales 144,000 x 70% = $100,800

February credit sales 120,000 x 30% = $36,000

Total cash colected in March $172,800

Notes:

March credit sales: 180,000 total sales x 80% = 144,000

February credit sales 150,000 total sales x 80% = 120,000