please assist. thanks so much! Here is a forecast of sales by National Bromide f

Question

please assist. thanks so much!

Here is a forecast of sales by National Bromide for the first 4 months of 2017 (figures in thousands of dolilars) Month: Cash sales Credit sales 2837 3127 165 185 155 135 On average, 60% of credit sales are paid for in the current month, 20% in the next month, and the remainder in the month after that What are the expected cash collections in months 3 and 47 (Enter your answers in whole dollars not in thousands of dollars.) Expected Cash Collections Month 3 Month 4

Explanation / Answer

working note:

month 3 cash collections = month 3 cash sales + 60 % of month 3 credit sales + 20% of month 2 credit sales +20% of month 1 credit sales

=>31 + 60% *155 + 20%*185 + 20% * 165

=>194,000

mnth 4 cash collections = month 4 cash sales + 60% of month 4 credit sale + 20% of month 3 credit sale +20% of month 2 credit sale

=>27 + 60%*135 + 20%*155 + 20%*185

=>176,000

expected cash collections month 3 194,000 month 4 176,000

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