Question

Junior Snacks reports the following information from its sales budget:

Expected sales: October $ 143,000 November 151,000 December 187,000
All sales are on credit and are expected to be collected 40% in the month of sale and 60% in the month following sale. The total amount of cash expected to be received from customers in November is:

A. $146,200.

B. $85,800.

C. $151,000.

D. $236,800.

E. $60,400.

Answer 1

Answer:

A. $146,200

Explanation:

Collection from October sales (60% of October sales) [14300 x 60%]$ 85,800.00

Collection from November sales (40% of November sales) [151000 x 40%] $

60,400.00

Total collection in November $ 146,200.00

Therefore The total amount of cash expected to be received from customers in November is: $ 146,200.00

Answer 2

Answer:

A. $146,200

Explanation:

Cash from the sales made on credit is collection after some time period. Some receivables are collected in the period of sale and remaining after that period.

In this question 40% of sales made in October collected in this month and 60% in November. Same for Following Months

Collection in November

Current Months Sales (40% x $151,000)  $60,400

October sales ( 60% x $143,000 )            $85,800

Total Cash Collection in November         $146,200