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 the total cash receipts for the month of June, we need to add up the cash received for all credit sales made 30% in May, 60% in April, and 10% in March.

May credit sales = $200,000 * 30% = $60,000
April credit sales = $220,000 * 60% = $132,000
March credit sales = $180,000 * 10% = $18,000

Total cash receipts for June = $60,000 + $132,000 + $18,000 = $195,000

Therefore, the best choice is C, $195,400.