The Danser Corporation expects to generate sales equal to $30,000 in January, $33,000 in February, and $38,000 in March. Twenty (20) percent of all sales are for cash, 50 percent are credit sales that are paid in the month following the sale, and 30 percent are credit sales that are paid two months following the sale. What are Danser's total cash collections in March?

Question

Quizplus · Accepted Answer

The total cash collected in March will include: 
1. 20% of March sales paid in cash in March: 0.2 x $38,000 = $7,600 
2. 50% of February credit sales paid in March: 0.5 x $33,000 = $16,500 
3. 30% of January credit sales paid in March: 0.3 x $30,000 = $9,000

Total cash collections in March = $7,600 + $16,500 + $9,000 = $33,100.

Therefore, the best choice is D.

The Danser Corporation Expects to Generate Sales Equal to $30,000