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company’s projected revenue for 20X6 is $342000. it is forcast that 20% of revenue will occur in January and the rest will be equally spread among the remaining 11 months. All sale are on credit. Payment is expected to be received as follow:
50% received in the month of sale
45% received in the following month
5% not received and written off as bad debts after two months
What are the budgeted cash collections for March?May you help to explain and answering with this exercise please?
ThankWhy are you attempting a question for which you do not have an answer? You should be using a Revision Kit – it has answers and explanations!
The sales in January are 20% x 342,000 = 68,400. The sales in each month from February onwards are (80% x 342,000) / 11 = 24,873,
In March they will receive 50% of the sales in March (so 50% x 24,873), and will also receive 45% of the sales in February (45% x 24,873).
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Thank You Brother.
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