The Task Company is to begin operations in April.It has budgeted April sales of $30,000,May sales of $34,000,June sales of $40,000,July sales of $42,000,and August sales of $38,000.Note that 10% of each month's sales will represent cash sales;75% of the balance will be collected in the month following the sale,17% the second month,6% the third month,and the balance is bad debts.What is the amount of cash to be collected in the month of July?

Question

Quizplus · Accepted Answer

In July, cash collected includes: 10% of July sales ($42,000 * 10% = $4,200), 75% of June's credit sales ($36,000 * 75% = $27,000), and 17% of May's credit sales ($30,600 * 17% = $5,202). Total = $4,200 + $27,000 + $5,202 = $38,402.

The Task Company Is to Begin Operations in April