Question

A company's history indicates that 25% of its sales are for cash and the rest are on credit. Collections on credit sales are 25% in the month of the sale, 40% in the next month, and 20% the following month. Projected sales for January, February, and March are $67,000, $92,000 and $102,000, respectively. The March expected cash receipts from all current and prior credit sales is:

Answer 1

The March expected cash receipts from all current and prior credit sales is $ 56,775

Month			January	February	March
Sales	a		$       67,000	$       92,000	$       1,02,000
Credit sales	b=a*75%		$       50,250	$       69,000	$           76,500
Collection of credit sales of:
January			$       12,563	$       20,100	$           10,050
February				$       17,250	$           27,600
March					$           19,125
Total			$       12,563	$       37,350	$           56,775