A company's history indicates that 20% of its sales are for cash and the remaining 80% are on credit. Collections on credit sales are 30% in the month of the sale and 70% the following month. Projected sales for January, February, and March are $75,000, $92,000 and $60,000, respectively. The March expected cash receipts are $80,500.
Answer the following statement true (T) or false (F)
False
| March cash sales ($60,000 × .20) | $ | 12,000 | ||
| 30% of March credit sales | 30% × (80% × $60,000) = | $ | 14,400 | |
| 70% of February credit sales | 70% × (80% × $92,000) = | 51,520 | ||
| Total cash collected in March | $ | 77,920 | ||
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