Farmington Enterprises has budgeted sales for the months of September and October at $300,000 and $280,000, respectively. Monthly sales are 80% credit and 20% cash. Of the credit sales, 50% are collected in the month of sale and 50% are collected in the following month. What are the October cash collections from customers?

Question

Quizplus · Accepted Answer

C) Calculations:
$280,000 × 20% = $56,000
($280,000 × 80%) × 50% = $112,000
($300,000 × 80%) × 50% = $120,000
$56,000 + $112,000
+ $120,000 = $288,000

Farmington Enterprises Has Budgeted Sales for the Months of September