Tracy Corp. expects sales of $30,000, $36,000 and $40,000 for the months of January, February and March respectively. Historically, 60% of credit customers pay in the month of sale, 30% in the month following the month of sale, and 10% in the second month following sale.
a. Forecast Tracy's March receipts if 100% of customers buy on credit.
b. Forecast Tracy's March receipts if 80% of customers buy on credit and 20% pay cash.

Question

Tracy Corp. expects sales of $30,000, $36,000 and $40,000 for the months of January, February and March respectively. Historically, 60% of credit customers pay in the month of sale, 30% in the month following the month of sale, and 10% in the second month following sale. 
a. Forecast Tracy's March receipts if 100% of customers buy on credit. 
b. Forecast Tracy's March receipts if 80% of customers buy on credit and 20% pay cash.

Quizplus · Accepted Answer

The Answer of Tracy Corp. expects sales of $30,000, $36,000 and $40,000 for the months of January, February and March respectively. Historically, 60% of credit customers pay in the month of sale, 30% in the month following the month of sale, and 10% in the second month following sale. 
a. Forecast Tracy's March receipts if 100% of customers buy on credit. 
b. Forecast Tracy's March receipts if 80% of customers buy on credit and 20% pay cash.