Groundworks Company budgeted the following credit sales during the current year: September, $90,000; October, $123,000; November, $105,000; December, $111,000. Experience has shown that cash from credit sales is received as follows: 10% in the month of sale, 50% in the first month after sale, 35% in the second month after sale, and 5% is uncollectible. How much cash should Groundworks Company expect to collect in November from its current and past credit sales?

What will be an ideal response?


10% of November sales (10% ? $105,000) ……. $ 10,500
50% of October sales (50% ? $123,000) ……….61,500
35% of September sales (35% ? $90,000) …….31,500
Total cash collected in November ……………… $103,500

Business

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