Ruby Corporation has the following sales budget for the last six months of 20X0: $$\begin{array} { l l l l }
\text { July } & \$ 100,000 & \text { Octob er } & \$ 90,000 \
\text { August } & 80,000 & \text { N ovemb er } & 100,000 \
\text { September } & 110,000 & \text { D ecember } & 94,000
\end{array}$$ Historically, the cash collection of sales has been as follows: 65% of sales collected in month of sale 25% of sales collected in month following sale
8% of sales collected in second month following sale 2% of sales are uncollectible
Is the expected cash collection in October.

Question

Ruby Corporation has the following sales budget for the last six months of 20X0: $$\begin{array} { l l l l } 
\text { July } & \$ 100,000 & \text { Octob er } & \$ 90,000 \
\text { August } & 80,000 & \text { N ovemb er } & 100,000 \
\text { September } & 110,000 & \text { D ecember } & 94,000
\end{array}$$ Historically, the cash collection of sales has been as follows: 65% of sales collected in month of sale 25% of sales collected in month following sale
8% of sales collected in second month following sale 2% of sales are uncollectible
Is the expected cash collection in October.

Quizplus · Accepted Answer

The expected cash collection in October includes 65% of October sales, 25% of September sales, and 8% of August sales. Calculating: (0.65 * $90,000) + (0.25 * $110,000) + (0.08 * $80,000) = $58,500 + $27,500 + $6,400 = $92,400.

Ruby Corporation Has the Following Sales Budget for the Last