A company's past experience indicates that 60% of its credit sales are collected in the month of sale, 30% in the next month, and 5% in the second month after the sale; the remainder is never collected. Budgeted credit sales were: $$\begin{array} { l r }
\text { July } & \$ 240,000 \
\text { August } & 144,000 \
\text { September } & 360,000
\end{array}$$ The cash inflow in the month of September is expected to be
A) $271,200.
B) $205,200.
C) $216,000.
D) $259,200.

Question

A company's past experience indicates that 60% of its credit sales are collected in the month of sale, 30% in the next month, and 5% in the second month after the sale; the remainder is never collected. Budgeted credit sales were: $$\begin{array} { l r } 
\text { July } & \$ 240,000 \
\text { August } & 144,000 \
\text { September } & 360,000
\end{array}$$ The cash inflow in the month of September is expected to be
A) $271,200.
B) $205,200.
C) $216,000.
D) $259,200.

Quizplus · Accepted Answer

60% of September's sales are collected in September ($360,000 x 0.60 = $216,000). 30% of August's sales are collected in September ($144,000 x 0.30 = $43,200). Total cash inflow in September is $216,000 + $43,200 = $259,200.

A Company's Past Experience Indicates That 60% of Its Credit July $240,000 August 144,000 September 360,000\begin{array} { l r } \text { July } & \$ 240,000 \\\text { August } & 144,000 \\\text { September } & 360,000\end{array} July August September ​$240,000144,000360,000​

A Company's Past Experience Indicates That 60% of Its Credit $\begin{array} { l r } \text { July } & \$ 240,000 \\\text { August } & 144,000 \\\text { September } & 360,000\end{array}$