Gallonte Inc. began operations in April of this year. It makes all sales on account, subject to the following collection pattern: 25% are collected in the month of sale; 55% are collected in the first month after sale; and 20% are collected in the second month after sale. If sales for April, May, and June were $57,000, $77,000, and $67,000, respectively, what were the firm's budgeted collections for June?

Question

Jay Knox

Business

8 July, 20:13

Gallonte Inc. began operations in April of this year. It makes all sales on account, subject to the following collection pattern: 25% are collected in the month of sale; 55% are collected in the first month after sale; and 20% are collected in the second month after sale. If sales for April, May, and June were $57,000, $77,000, and $67,000, respectively, what were the firm's budgeted collections for June?

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Answers (1)

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Heaven Howard · Answer 1

Total = $70,510

Explanation:

Giving the following information:

25% are collected in the month of sale; 55% are collected in the first month after the sale, and 20% are collected in the second month after sale. The sales for April, May, and June were $57,000, $77,000, and $67,000, respectively.

Cash collection:

June = 67,000*0.25 = 16,750

From May = 77,000*0.55 = 42,360

From April = 57,000*0.2 = 11,400

Total = $70,510