Fescue, Inc. is in a lawncare business that specializes in residential services. A large majority of their customers have set up accounts to pay their bills for services the month after the service has been rendered while other customers pay as soon as the work is completed. Artemis estimates that Fescue, Inc. will collect 40% of their payments in the month that the services are provided, 45% of their payments in the month after the services have been provided, and the remaining 15% of their payments two months after the services have been provided. Fescue's sales were as follows: August, $10,000; September, $13,000; October, $9,500; and November, $7,300. What will the total amount of cash collected in October be?

Question

Quizplus · Accepted Answer

The correct answer is $11,150. To get the correct total for October, add $1,500 ($10,000 × 15% from 2 months prior) + $5,850 ($13,000 × 45% from the previous month) + $3,800 ($9,500 × 40% collected in the month that services are provided).