Question

A company's history indicates that 20% of its sales are for cash and the rest are on credit. Collections on credit sales are 20% in the month of the sale, 50% in the next month, 25% the following month, and 5% is uncollectible. Projected sales for December, January, and February are $60,000, $85,000 and $95,000, respectively. The February expected cash receipts from all current and prior credit sales is:

Answer 1

The February expected cash receipts from all current and prior credit sales is: 61200.

Cash receipts from December sales 12000  =60000*80%*25%

Cash receipts from January sales 34000  =85000*80%*50%

Cash receipts from February sales 15200  =95000*80%*20%

February expected cash receipts from all

current and prior credit sales 61200

credit sales are purchases made by means of customers for which payment is behind schedule. delayed payments allow clients to generate cash with the bought items, that is then used to pay back the vendor. hence, an affordable payment delay permits clients to make additional purchases.

A credit score income magazine entry is a sort of accounting access that is used to record the sale of merchandise on credit score. The access is made by means of debiting the accounts Receivable and crediting the income account. the amount of the sale is usually recorded within the magazine as nicely. despite the fact that the client will pay in coins at a later date, it is nonetheless not a coins sale.

Learn more about credit sales here: https://brainly.com/question/4068271

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