Alpha Company makes all its sales on account. Accounts receivable payment experience is as follows: Percent...
Alpha Company makes all its sales on account. Accounts
receivable payment experience is as follows:
| Percent paid in the month of sale | 35% |
| Percent paid in the month after the sale | 54% |
| Percent paid in the second month after the sale | 6% |
Alpha provided information on sales as follows:
| May | $150,000 |
| June | $125,000 |
| July | $136,000 |
| August (expected) | $142,000 |
How much of June's credit sales is expected to be collected in the
month of July?
a.$60,000
b.$36,000
c.$67,500
d.$80,000
e.$30,000
Homework Answers
Calculate expected cash collection in july :
Cash collection in july = 125000*54% = 67500
So answer is c) $67500
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