# Tanya Corp. sells its products on both credit and cash basis. Monthly sales are sold 20% for...

## Question:

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:

January, $250,000; February,$360,000;

March, $300,000. Compute cash collections budgeted for February. How much cash was collected in the month? ## Cash Collection: The amount of money which is given on credit has to be collected. So, the cash collection is the amount of cash collected after a particular period of time. ## Answer and Explanation: Figures in ($)

 Particulars January February March 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