Dandy Jeans sells two lines of jeans; Simple Life and Fancy Life. Simple Life se

Question

Dandy Jeans sells two lines of jeans; Simple Life and Fancy Life. Simple Life sells for $85.00 a pair
and Fancy Life sells for $100.00 a pair. The company sells all of its jeans on credit and estimates that
60% is collected in the month of the sale, 35% is collected in the following month, and the rest is
considered to be uncollectible. The estimated sales for Simple are as follows: January 20,000 jeans,
February 27,500 jeans, and March 25,000 jeans. The estimated sales for Fancy are as follows:
January 18,000 jeans, February 19,000, and March 20,500 jeans. What are the expected cash receipts
for the month of March?

Explanation / Answer

Working Total Sale Collection in MArch Simple Jan 1,700,000 - Feb 2,337,500 818,125 Mar 2,125,000 1,275,000 Fancy Jan 1,800,000 - Feb 1,900,000 665,000 Mar 2,050,000 1,230,000 Total Cash collected 3.988,125

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