McCloud Company has budgeted the following credit sales during the last four months of the year: September,$16,000; October,$22,000; November $21,000; December,$24,000.Experience has shown that payment for the credit sales is received as follows: 15% in the month of sale,60% in the first month after sale,20% in the second month after sale,and 5% uncollectible.How much cash can McCloud Company expect to collect in November as a result of credit sales?

Question

Quizplus · Accepted Answer

To calculate the total cash collections in November, we need to calculate the cash collections from September, October, and November. The cash collections from September will be 15% of $16,000 = $2,400. The cash collections from October will be 60% of $22,000 = $13,200. The cash collections from November will be 20% of $21,000 = $4,200. The total cash collections from September, October, and November will be $2,400 + $13,200 + $4,200 = $19,800. Therefore, the cash collections that McCloud Company can expect to collect in November as a result of credit sales is $19,550, which is option D.

McCloud Company Has Budgeted the Following Credit Sales During the Last