Hernandez Company expects credit sales for January to be $48,000. Cash sales are expected to be $28,000. The company expects credit and cash sales to increase 10% for the month of February. Credit sales are collected in the month following the month in which sales are made. Based on this information, the amount of cash collections in February would be:

Question

Quizplus · Accepted Answer

Cash collections in February include cash sales for February and credit sales for January. Cash sales for February are $28,000 * 1.10 = $30,800. Credit sales for January are $48,000, which will be collected in February. Therefore, total cash collections in February are $30,800 + $48,000 = $78,800.

Hernandez Company Expects Credit Sales for January to Be $48,000