Bandall Corporation estimates that for credit sales, 55% of cash is received in the month of sale; 35% in the month after the sale, and 13% second month after the sale. The remainder is never collected. Bandall had credit sales of $78,000 in April; $92,000 in May, and $115,000 in June. Given the following information, determine the cash collections for June.

Question

Quizplus · Accepted Answer

Cash collections for June include 55% of June sales ($115,000), 35% of May sales ($92,000), and 13% of April sales ($78,000). Calculating these: (0.55 * $115,000) + (0.35 * $92,000) + (0.13 * $78,000) = $63,250 + $32,200 + $10,140 = $105,590.

Bandall Corporation Estimates That for Credit Sales, 55% of Cash