Funcycle Manufacturing's budget includes the following credit sales for the current year: September,$145,000;October,$136,000;November,$120,000;December,$157,000.Experience has shown that payment for the credit sales is received as follows: 15% in the month of sale,50% in the first month after sale,and 35% in the second month after sale.What are the cash collections of credit sales in the month of December?
A)$23,550.
B)$107,600.
C)$83,550.
D)$157,000.
E)$131,150.

Question

Quizplus · Accepted Answer

Cash collections in December include 15% of December sales ($157,000 * 15% = $23,550), 50% of November sales ($120,000 * 50% = $60,000), and 35% of October sales ($136,000 * 35% = $47,600). Total = $23,550 + $60,000 + $47,600 = $131,150.

Funcycle Manufacturing's Budget Includes the Following Credit Sales for the Current