Jackson Company's credit history indicates that 60 percent of revenue is collected in the quarter the sales occur, 35 percent in the quarter following the month of sales, and 5 percent in the quarter thereafter.Assume Jackson's cash sales remain steady at $25,000 each quarter, credit sales are $600,000 in quarter 1, $520,000 in quarter 2, $480,000 in quarter 3, and $650,000 in quarter 4.What will Jackson's cash collections from sales be for the quarter 3?

Question

Quizplus · Accepted Answer

Cash collections from sales for quarter 3 = (35% of $600,000) + (5% of $520,000) + (60% of $480,000) + $25,000 = $525,000

Jackson Company's Credit History Indicates That 60 Percent of Revenue