Baby Boo Boutique had sales of $78,000 in December, 2014. Sales for the first three months of 2015 are: $$\begin{array} { l r }
\text { January } & \$ 84,000 \
\text { February } & 80,000 \
\text { March } & 68,000
\end{array}$$ In the past, Baby Boo has found that 25% of the sales revenue is collected in the month of the sale and 75% is collected in the following month. If this pattern continues, what will be the amount of Baby Boo's cash receipts in February?

Question

Baby Boo Boutique had sales of $78,000 in December, 2014. Sales for the first three months of 2015 are: $$\begin{array} { l r } 
\text { January } & \$ 84,000 \
\text { February } & 80,000 \
\text { March } & 68,000
\end{array}$$ In the past, Baby Boo has found that 25% of the sales revenue is collected in the month of the sale and 75% is collected in the following month. If this pattern continues, what will be the amount of Baby Boo's cash receipts in February?

Quizplus · Accepted Answer

25% of December sales ($78,000 x 0.25 = $19,500) will be collected in January. 75% of December sales ($78,000 x 0.75 = $58,500) will be collected in February. 25% of January sales ($84,000 x 0.25 = $21,000) will be collected in February. Total cash receipts in February = $19,500 + $58,500 + $21,000 = $83,000

Baby Boo Boutique Had Sales of $78,000 in December, 2014 January $84,000 February 80,000 March 68,000\begin{array} { l r } \text { January } & \$ 84,000 \\\text { February } & 80,000 \\\text { March } & 68,000\end{array} January February March ​$84,00080,00068,000​

Baby Boo Boutique Had Sales of $78,000 in December, 2014 $\begin{array} { l r } \text { January } & \$ 84,000 \\\text { February } & 80,000 \\\text { March } & 68,000\end{array}$