San Francisco Company expects August sales to be $32,000.Approximately 40% of sales are cash sales.Collection of credit sales are 50% in the month of sale,40% in the month following sale and 5% two months following sale.The remaining 5% is uncollectible.________ is the expected cash collection in August from August sales.

Question

Quizplus · Accepted Answer

Cash sales = 40% of $32,000 = $12,800Credit sales = 60% of $32,000 = $19,200Cash collection from credit sales in August = 50% of $19,200 = $9,600Total cash collection in August = $12,800 + $9,600 = $22,400

San Francisco Company Expects August Sales to Be $32,000