Sunset Center's sales are all made on account.The firm's collection experience has been that 25 percent of a month's sales are collected in the month of sale, 65 percent are collected in the month following the sale, and 8 percent are collected in the second month following the sale.The sales forecast for the months of May through August is:
$$\begin{array} { l l }
\text { May } & \$ 240,000 \
\text { June } & \$ 280,000 \
\text { July } & \$ 300,000 \
\text { August } & \$ 350,000
\end{array}$$
Calculate the cash collections that would be included in the cash budgets for July and August.

Question

Sunset Center's sales are all made on account.The firm's collection experience has been that 25 percent of a month's sales are collected in the month of sale, 65 percent are collected in the month following the sale, and 8 percent are collected in the second month following the sale.The sales forecast for the months of May through August is:
 $$\begin{array} { l l } 
\text { May } & \$ 240,000 \
\text { June } & \$ 280,000 \
\text { July } & \$ 300,000 \
\text { August } & \$ 350,000
\end{array}$$ 
Calculate the cash collections that would be included in the cash budgets for July and August.

Quizplus · Accepted Answer

The Answer of Sunset Center's sales are all made on account.The firm's collection experience has been that 25 percent of a month's sales are collected in the month of sale, 65 percent are collected in the month following the sale, and 8 percent are collected in the second month following the sale.The sales forecast for the months of May through August is:
 $$\begin{array} { l l } 
\text { May } & \$ 240,000 \
\text { June } & \$ 280,000 \
\text { July } & \$ 300,000 \
\text { August } & \$ 350,000
\end{array}$$ 
Calculate the cash collections that would be included in the cash budgets for July and August.

Sunset Center's Sales Are All Made on Account Calculate the Cash Collections That Would Be Included in the Experience