Camellia,a merchandising company,has provided the following extracts from their budget for the first quarter of the forthcoming year: $$\begin{array} { | l | c | c | c | }
\hline & \text { Jan } & \text { Feb } & \text { March } \
\hline \text { Sales } ( 25 \% \text { cash } ) & \$ 500,000 & \$ 600,000 & \$ 800,000 \
\hline
\end{array}$$ The company collects 70% of credit sales in the same month and the balance in the next month.Calculate the collections from the customers for the month of February.

Question

Camellia,a merchandising company,has provided the following extracts from their budget for the first quarter of the forthcoming year: $$\begin{array} { | l | c | c | c | } 
\hline & \text { Jan } & \text { Feb } & \text { March } \
\hline \text { Sales } ( 25 \% \text { cash } ) & \$ 500,000 & \$ 600,000 & \$ 800,000 \
\hline
\end{array}$$ The company collects 70% of credit sales in the same month and the balance in the next month.Calculate the collections from the customers for the month of February.

Quizplus · Accepted Answer

In February, cash sales are 25% of $600,000 = $150,000. Credit sales are 75% of $600,000 = $450,000. Of these credit sales, 70% are collected in February, which is $315,000. Additionally, 30% of January's credit sales ($375,000) are collected in February, which is $112,500. Total collections in February = $150,000 + $315,000 + $112,500 = $577,500.

Camellia,a Merchandising Company,has Provided the Following Extracts from Their Budget