June sales were $40,000 while projected sales for July and August were $50,000 and $60,000, respectively. Sales are 40% cash and 60% credit. All credit sales are collected in the month following the sale. Calculate expected collections for July.

Question

Quizplus · Accepted Answer

- June cash sales = 40% x $40,000 = $16,000
- June credit sales = 60% x $40,000 = $24,000
- Projected cash sales for July = 40% x $50,000 = $20,000
- Projected credit sales for July = 60% x $50,000 = $30,000 (which will be collected in August)
- Total expected collections for July = June credit sales + July cash sales = $24,000 + $20,000 = $44,000

June Sales Were $40,000 While Projected Sales for July and August