The Blatz Brewing Company produces 25 million hectolitres of beer each year.To put this in perspective,California consumed that much beer last year.A sales forecast for Blatz is provided in the top row of the table.Blatz sells its beer at a wholesale price of US$85 per hectoliter.All sales are on account and 75% of receivables are collected after 1 month,while 25% are collected after 2 months.What are Blatz' cash collections in March?
Sales and Cash Inflow Forecast
Blatz Brewing Company

Question

Quizplus · Accepted Answer

Collections in March = 0.75 × February Sales + 0.25 × January Sales
Collections in March = 0.75 × $85 + 0.25 × $85
Collections in March = $63.75 + $21.25 = $85

The Blatz Brewing Company Produces 25 Million Hectolitres of Beer