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

Question

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In July, the firm will receive 20% of July sales in cash ($300 * 20% = $60) and 80% of June sales collected in July ($200 * 80% = $160). Total cash receipts in July = $60 + $160 = $220.

A Firm Has Projected Sales in May, June, and July