For Dubinsky Company, experience has shown that payment for the credit sales is received as follows: 40% in the month of sale, 40% in the first month after sale, 10% in the second month after sale, and 10% uncollectible. Dubinsky Company has budgeted the following credit sales during the last four months of the year: September, $15,000; October, $18,000; November $16,000; December, $34,000. How much cash can Dubinsky Company expect to collect in November as a result of credit sales?

Question

Quizplus · Accepted Answer

In November, Dubinsky Company can expect to collect cash from credit sales made in September, October, and November. From September sales ($15,000), 10% is collected, which is $1,500. From October sales ($18,000), 40% is collected, which is $7,200. From November sales ($16,000), 40% is collected, which is $6,400. Adding these amounts together gives $1,500 + $7,200 + $6,400 = $15,100.

For Dubinsky Company, Experience Has Shown That Payment for the Credit