Ningbo shipping has projected sales in May, June, and July of $100, $200, and $300, respectively. It makes 20 percent of sales for cash and collects the balance one month following the sale. Ningbo Shipping's total cash receipts in July are
A) $220
B) $200
C) $180
D) $100

Question

Quizplus · Accepted Answer

In July, Ningbo Shipping will collect 20% of July sales in cash, which is 20% of $300 = $60. Additionally, it will collect the balance of June's sales (80% of $200 = $160). Therefore, total cash receipts in July are $60 (from July sales) + $160 (from June sales) = $220.

Ningbo Shipping Has Projected Sales in May, June, and July