Question

ZZ, Inc. has budgeted sales in units for the next six months as follows:

                  Budgeted Sales in Units
July                    7,700 units                             
August                  8,300 units
September               5,400 units
October                10,200 units
November               ?????? units
December               11,700 units

The selling price is $18 per unit. 30% of the company's sales are cash
sales and 70% of the company's sales are made on account. The sales on
account are collected in the pattern 15% in the month of sale, 20% in
the month following sale, 55% in the second month following sale, and
the final 10% is collected in the third month following sale.

Calculate the total expected cash collections for the month of October.

Answer 1

	October
Cash sales	55080	=10200*18*30%
Credit sales:
Collection from July sales	9702	=7700*70%*10%
Collection from August sales	57519	=8300*18*70%*55%
Collection from September sales	13608	=5400*18*70%*20%
Collection from October sales	19278	=10200*18*70%*15%
Total expected cash collections	155187

Answer 2

	Collection in October
July Account Sales (7,700 units * 70% * 10%) *$18	$9,702
August Account Sales (8,300 units * 70% * 55%) *$18	$57,519
September Account Sales (5,400 units * 70% * 20%)*$18	$13,608
October Account Sales (10,200 units * 70% * 15%) *$18	$19,278
October Cash Sales (10,200 units * 30%) *$18	$55,080
Total Expected Cash Collections for the month of October	$155,187