Lee Carter Inc.forecast of sales is as follows: July,$50,000;August,$80,000;September,$150,000.Sales are normally 75 percent cash and 25 percent credit.Credit sales are collected in full in the following month.Merchandise cost averages 70 percent of sales price.The company desires an inventory as of September 30 of $50,000.The inventory as of June 30 was $30,000.The accounts receivable had zero balance on June 30.
-Total cash receipts for August of Lee Carter will be

Question

Lee Carter Inc.forecast of sales is as follows: July,$50,000;August,$80,000;September,$150,000.Sales are normally 75 percent cash and 25 percent credit.Credit sales are collected in full in the following month.Merchandise cost averages 70 percent of sales price.The company desires an inventory as of September 30 of $50,000.The inventory as of June 30 was $30,000.The accounts receivable had zero balance on June 30. 
-Total cash receipts for August of Lee Carter will be

Quizplus · Accepted Answer

For August, the total cash receipts include cash sales for August and the collection of all credit sales from July. July's sales were $50,000, with 75% ($37,500) in cash and 25% ($12,500) in credit. August's sales are $80,000, with 75% in cash, which equals $60,000. The total cash receipts for August are the sum of August's cash sales ($60,000) and the collection of July's credit sales ($12,500), totaling $72,500.