Matterhorn,Inc.had the following sales for the past six months.Matterhorn collects its credit sales 30% in the month of sale,60% one month after the sale,and 10% two months after the sale.

What are Matterhorn's total cash receipts for the month of June?

Question

Matterhorn,Inc.had the following sales for the past six months.Matterhorn collects its credit sales 30% in the month of sale,60% one month after the sale,and 10% two months after the sale.

What are Matterhorn's total cash receipts for the month of June?

Quizplus · Accepted Answer

To find out the total cash receipts for the month of June, we need to look at the sales that occurred in March and April (two months before June).

30% of March sales would have been collected in March, leaving 70% to be collected later. 
60% of March sales would have been collected in April, leaving 10% to be collected in May and 30% to be collected later. 
10% of April sales would have been collected in May, leaving 90% to be collected later.

Therefore, the total cash receipts for June would be:
70% of March sales + 10% of April sales = $195,400

Therefore, the correct answer is choice C.