Oakton Furniture provided the following information relevant to its sales for December Year 1 and the first quarter of Year 2 Based on the company's collection history, 42% of credit sales are collected in month of sale and the remainder is collected in the following month. Cash collections in January from December credit sales would be:

Question

Oakton Furniture provided the following information relevant to its sales for December Year 1 and the first quarter of Year 2  Based on the company's collection history, 42% of credit sales are collected in month of sale and the remainder is collected in the following month. Cash collections in January from December credit sales would be:

Quizplus · Accepted Answer

Collections in January from December credit sales = December credit sales × Percent collected in month following month of sale
Collections in January from December credit sales = $120,000 × (100% - 42%) = $69,600

Oakton Furniture Provided the Following Information Relevant to Its Sales