The Company receives 20% of its monthly sales immediately in cash, 70% in the following month and the balance in the month after that. If it had sales of $1.2 million in April, $1 million in May, $1.4 million in June and $1.3 million in July, how much cash is received from its customers in July?

Question

Quizplus · Accepted Answer

The cash received from sales in July will consist of 20% of the April sales, 70% of the May sales, and 10% of the June sales:

20% of $1.2 million= $240,000
70% of $1 million = $700,000
10% of $1.4 million = $140,000

Total cash received in July = $240,000 + $700,000 + $140,000 = $1.34 million, which is option C.

The Company Receives 20% of Its Monthly Sales Immediately in Cash