pulted to be collected in the month of sale and the remainder the Cli ndise for
ID: 2566636 • Letter: P
Question
pulted to be collected in the month of sale and the remainder the Cli ndise for cash. Of the remaining 80% of lOWihg month. The January cash collections from sales are: $812,000 b. $688,000 c. $468,000 d. $984,000 Wright Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $240,000, S300,000, and $420,000, respectively, for September, October, and November. The company expects to sell 20% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale, 25% in the month following the sale, and the remainder in the following month. The cash collections in September from accounts receivable are: a. $240,000 b. $134,400 c. $192,000 4. $168,000Explanation / Answer
Started operations in September
Cash sales = 20%
Credit sales = 80%
Sales in September = 240,000
Credit sales in September = 240,000 * 80% = 192,000
70% of Accounts receivables are collected in the month of sale
Cash collections in september from Accounts receivables = 192,000 * 70% = 134,400
The answer is B.
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