The Gadget Company manufactures a wrist watch for spy agencies.The watch has a built-in cell phone,Geiger counter,compass,magnet and garroting wire.Sales are expected to commence in February and remain level at 10,000 units per month.The watch sells for $2 per unit.Gadget expects all of its sales to be on credit,and will collect half of its accounts in the month after the sale and the other half two months after the sale.What are total cash inflows in April?
Sales and Collections Forecast
The Gadget Company

Question

Quizplus · Accepted Answer

Total Cash inflows in April = 0.50 × March Sales + 0.50 × February Sales
Total Cash inflows in April = 0.50 × $20,000 + 0.5 × $20,000
Total Cash inflows in April = $10,000 + $10,000
Total Cash inflows in April = $20,000

The Gadget Company Manufactures a Wrist Watch for Spy Agencies