Justin Company\'s budget includes the following credit sales for the current yea

Question

Justin Company's budget includes the following credit sales for the current year: September, $45,000; October, $56,000; November, $50,000; December, $52,000. Experience has shown that payment for the credit sales s received as follows: 10% in the month of sale 65% in the fist month after sale. 23%in the second mon a er sa and Sis uncollectio e How much cash can Justin Company expect to collect in November as a result of current and past credit sales? Multiple Choice $51.750. $40,350. $49150. $54,550. $50,000

Explanation / Answer

A. $51,750

Amount of cash Justin company can expect to collect in November as a result of current and past credit sales:

= ($50,000 × 0.10) + ($56,000 × 0.65) + ($45,000 × 0.23)

= $51,750

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