Cicero Manufacturing Inc.sells gloves at local ski resorts during the winter months.Each pair of gloves sells for $15.The following sales forecast (in units)has been prepared for October 2008 through March 2009:
$\begin{array}{lr}
\text { October } & 500 \
\text { November } & 800 \
\text { December } & 1000 \
\text { January } & 1200 \
\text { February } & 900 \
\text { March } & 600
\end{array}$
Historically,the cash collection of sales has been as follows: 60 per cent in the month of sale,35 per cent in the month following sale,and 4 per cent in the second month following sale.The remaining 1 per cent is uncollectible.
Cash receipts for January are expected to be:

Question

Cicero Manufacturing Inc.sells gloves at local ski resorts during the winter months.Each pair of gloves sells for $15.The following sales forecast (in units)has been prepared for October 2008 through March 2009:
$\begin{array}{lr}
\text { October } & 500 \
\text { November } & 800 \
\text { December } & 1000 \
\text { January } & 1200 \
\text { February } & 900 \
\text { March } & 600
\end{array}$ 
Historically,the cash collection of sales has been as follows: 60 per cent in the month of sale,35 per cent in the month following sale,and 4 per cent in the second month following sale.The remaining 1 per cent is uncollectible.
Cash receipts for January are expected to be:

Quizplus · Accepted Answer

To calculate the cash receipts for January, we consider the sales from December, November, and January itself. For January sales ($15 * 1200), 60% is collected, which equals $10,800. For December sales ($15 * 1000), 35% is collected, which equals $5,250. For November sales ($15 * 800), 4% is collected, which equals $480. Adding these amounts gives us $16,530.

Cicero Manufacturing Inc Historically,the Cash Collection of Sales Has Been as Follows: 60