A company reports the following information from its sales account and sales budget: $$\begin{array} { l l r }
\text { Sales } & \text { May } & \$ 52,000 \
& \text { Jure } & 47,000 \
\text { Expected } & \text { July } & \$ 45,000 \
\text { Sales: } & & \
& \text { August } & 55,000 \
& \text { September } & 60,000
\end{array}$$ Cash sales are normally 30% of total sales and all credit sales are expected to be collected in the month following the date of sale.The total amount of cash expected to be received from customers in September is:

Question

A company reports the following information from its sales account and sales budget: $$\begin{array} { l l r } 
\text { Sales } & \text { May } & \$ 52,000 \
& \text { Jure } & 47,000 \
\text { Expected } & \text { July } & \$ 45,000 \
\text { Sales: } & & \
& \text { August } & 55,000 \
& \text { September } & 60,000
\end{array}$$ Cash sales are normally 30% of total sales and all credit sales are expected to be collected in the month following the date of sale.The total amount of cash expected to be received from customers in September is:

Quizplus · Accepted Answer

1. Total sales in May and June: $52,000 + $47,000 = $99,000
2. Expected credit sales in July: $45,000
3. Expected total sales in August and September: $55,000 + $60,000 = $115,000
4. Total expected sales for the period: $99,000 + $45,000 + $115,000 = $259,000
5. Cash sales are normally 30% of total sales, so cash sales for the period: 0.3 x $259,000 = $77,700
6. Credit sales are expected to be collected in the month following the date of sale, so credit sales from August and September will be collected in September: $55,000 + $60,000 = $115,000
7. 70% of credit sales are expected to be collected in September: 0.7 x $115,000 = $80,500
8. The total amount of cash expected to be received from customers in September is the sum of cash sales and the expected amount of credit sales to be collected in September: $77,700 + $80,500 = $158,200
9. However, the question is asking for only the amount of cash expected to be received from customers in September, which is $77,700 x 70% = $56,500. Therefore, the answer is B.

A Company Reports the Following Information from Its Sales Account