The following table represents the credit sales of Seneca Foods for the first five months of this year:
According to their records, the company is expecting to receive payments for credit sales as follows: 60% in the month of sale, 20% in the first month after the sale, 15% in the second month after the sale, and the remainder becomes uncollectible. How much cash should Seneca expect to receive in May as a result of credit sales?

Question

The following table represents the credit sales of Seneca Foods for the first five months of this year:
 According to their records, the company is expecting to receive payments for credit sales as follows: 60% in the month of sale, 20% in the first month after the sale, 15% in the second month after the sale, and the remainder becomes uncollectible. How much cash should Seneca expect to receive in May as a result of credit sales?

Quizplus · Accepted Answer

Budgeted Cash Receipts in June = [(March's credit sales of $45,000 × 15% collected in May) + (April's credit sales of $51,000 × 20% collected in May) + (May's credit sales of $55,000 × 60% collected in May)] = [$6,750 + $10,200 + $33,000] = $49,950.
See additional explanation below:
 11ee941a_b722_68d2_bdb6_e55286ad1b94_TBW1041_00

The Following Table Represents the Credit Sales of Seneca Foods