Marsha Start is looking to restart a home economics related business after an unfortunate incarceration.She forecasts that sales for June,July,and August will be $100,000,$150,000,and $100,000,respectively.Start expects for cash sales to make up 25% of the sales in each month with 90% of the credit sales collected in the month after the sale and the remainder 2 months after the sale.What is Start's estimated total cash collections for August?

Question

Quizplus · Accepted Answer

August cash sales: 100,000 ´ .25 = 25,000
August collections for July: 150,000 ´ .75 ´ .9 = 101,250
August collections for June: 100,000 ´ .75 ´ .1 = 7,500
Total cash collections for August: 25,000 + 101,250 + 7,500 = 133,750

Marsha Start Is Looking to Restart a Home Economics Related