Tanya Corp. sells its products on both credit and cash basis. Monthly sales are sold 20% for cash, 80% for credit.
Credit sales are collected 65% in the month of sale and 35% the following month.
Sales for the first quarter are BUDGETED as follows:
Compute cash collections budgeted for February. How much cash was collected in the month?
The amount of money which is given on credit has to be collected. So, the cash collection is the amount of cash collected after a particular period of time.
Answer and Explanation:
Figures in ($)
|Sales (Given) (A)||250,000||360,000||300,000|
|Cash Sales (B) (20% of A)||50,000||72,000||60,000|
|Credit Sales (C) (80% of A)||200,000||288,000||240,000|
|Cash Collection (D) (65% of C)||130.000||187,200||156,000|
|Cash to be collected of the previous month (E) (F of Last Month)||0||70,000||100.800|
|Total Cash Collected (B+D+E)||180,000||329,200||316.800|
|Cash to be collected in the following month (F) (35% of C)||70,000||100,800||84,000|
Hence, from the above table answer to the question are as follows:
Cash Collections budgeted for February = $70,000
Cash collected in February = $329,200
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from Finance 101: Principles of FinanceChapter 18 / Lesson 3