Figure 8-4
Discus Productions needs to know its anticipated cash inflows for the next quarter by month. Cash sales are 10 percent of total sales each month. Historically, sales on account have been collected as follows: 60 percent in the month of sale, 30 percent in the month after the sale, and the remaining 10 percent two months after the sale. Sales for the quarter are projected as follows: April, $120,000; May, $100,000; and June, $80,000. Accounts receivable on March 31 were $60,000.
-Shiller Corporation has the following sales forecasts for the selected three-month period in 2016: All sales are on account. Seventy percent of sales are collected in the month of the sale, and the remainder are collected in the following month.
Accounts receivable balance (July 1, 2016) $20,000
Cash balance (July 1, 2016) 10,000
Minimum cash balance is $10,000. Cash can be borrowed in $1,000 increments from the local bank (assume no interest charges).
How much cash would be collected in September from sales?
A) $15,400
B) $17,000
C) $16,000
D) $20,000

Question

Figure 8-4
Discus Productions needs to know its anticipated cash inflows for the next quarter by month. Cash sales are 10 percent of total sales each month. Historically, sales on account have been collected as follows: 60 percent in the month of sale, 30 percent in the month after the sale, and the remaining 10 percent two months after the sale. Sales for the quarter are projected as follows: April, $120,000; May, $100,000; and June, $80,000. Accounts receivable on March 31 were $60,000.
-Shiller Corporation has the following sales forecasts for the selected three-month period in 2016:  All sales are on account. Seventy percent of sales are collected in the month of the sale, and the remainder are collected in the following month.
Accounts receivable balance (July 1, 2016) $20,000
Cash balance (July 1, 2016) 10,000
Minimum cash balance is $10,000. Cash can be borrowed in $1,000 increments from the local bank (assume no interest charges).
How much cash would be collected in September from sales?
A) $15,400 
B) $17,000 
C) $16,000 
D) $20,000

Quizplus · Accepted Answer

The Answer of Figure 8-4
Discus Productions needs to know its anticipated cash inflows for the next quarter by month. Cash sales are 10 percent of total sales each month. Historically, sales on account have been collected as follows: 60 percent in the month of sale, 30 percent in the month after the sale, and the remaining 10 percent two months after the sale. Sales for the quarter are projected as follows: April, $120,000; May, $100,000; and June, $80,000. Accounts receivable on March 31 were $60,000.
-Shiller Corporation has the following sales forecasts for the selected three-month period in 2016:  All sales are on account. Seventy percent of sales are collected in the month of the sale, and the remainder are collected in the following month.
Accounts receivable balance (July 1, 2016) $20,000
Cash balance (July 1, 2016) 10,000
Minimum cash balance is $10,000. Cash can be borrowed in $1,000 increments from the local bank (assume no interest charges).
How much cash would be collected in September from sales?
A) $15,400 
B) $17,000 
C) $16,000 
D) $20,000

Figure 8-4 Discus Productions Needs to Know Its Anticipated Cash Inflows for Inflows