Boylan Inc.has projected the following sales information for the first quarter of 2009:
$\begin{array}{lrr}
&\underline{\text { January }} &\underline{ \text { February }} &\underline{ \text { March }}\
\text {Cash sales}&\$20000&\$ 35000 & \$ 40000 \
\text {Credit sales}&\underline{43000}&\underline{57000} &\underline{ 55000} \
\text {Total sales}&\underline{\$63000}&\underline{ \$ 92000} &\underline{ \$ 95000}
\end{array}$
Credit sales are collected over a two-month period,with 55 per cent collected in the month of sale and 45 per cent collected in the month following sale.
Total cash collections for March are:
A) $55 900
B) $93 650
C) $70 250
D) $95 900

Question

Quizplus · Accepted Answer

To find the total cash collections for March, we need to determine the credit sales from January and February, and then calculate the portion of those sales that will be collected in March.

Credit sales from January: $78,000 x 40% = $31,200 
45% of January credit sales will be collected in March: $31,200 x 45% = $14,040

Credit sales from February: $93,000 x 55% = $51,150 
55% of February credit sales will be collected in March: $51,150 x 55% = $28,132.50

Total cash collections for March: $14,040 + $28,132.50 = $42,172.50

Adding the cash sales for March of $53,727.50 gives the total cash collections for March of $95,900, therefore the best choice is D.

Boylan Inc Credit Sales Are Collected Over a Two-Month Period,with 55 Per