Ningbo shipping has projected sales in May, June, and July of $100, $200, and $300, respectively.It makes 20 percent of sales for cash and collects the balance one month following the sale.Ningbo Shipping's total cash receipts in July are

Question

Quizplus · Accepted Answer

- Sales in May, June, and July: $100, $200, $300
- 20% of sales in cash, balance collected after a month
- Cash received in May: 20% of $100 = $20
- Cash received in June: 20% of $200 = $40
- Cash received in July: 20% of $300 = $60
- Balance collected in June from May sales: 80% of $100 = $80
- Balance collected in July from June sales: 80% of $200 = $160
- Total cash receipts in July: Cash received in July + Balance collected in July from June sales = $60 + $160 = $220

Therefore, the best choice is A) $220.

Ningbo Shipping Has Projected Sales in May, June, and July