A company collects 25% of its sales during the month of sale,65% one month after the sale,and 10% two months after the sale.The company expects sales of $50,000 in August,$80,000 in September,$90,000 in October,and $60,000 in November.How much money is expected to be collected in October?

Question

Quizplus · Accepted Answer

To calculate the expected collection in October, we need to find out how much of the October sales will be collected during that month, how much will be collected one month after, and how much will be collected two months after.

October sales = $90,000
25% of $90,000 will be collected in October = $22,500
65% of $90,000 will be collected one month after = $58,500
10% of $90,000 will be collected two months after = $9,000

Therefore, the total expected collection in October is $22,500.

A Company Collects 25% of Its Sales During the Month