A company collects 60% of its sales during the month of thesale, 30% one month a

Question

A company collects 60% of its sales during the month of thesale, 30% one month after the sale, and 10% two months after thesale. The company expects sales of $10,000 in August, $20,000 inSeptember, $30,000 in October, and $40,000 in November. How muchmoney is expected to be collected in October? a) $25,000 b) $15,000 c) $35,000 d) none of the above A company collects 60% of its sales during the month of thesale, 30% one month after the sale, and 10% two months after thesale. The company expects sales of $10,000 in August, $20,000 inSeptember, $30,000 in October, and $40,000 in November. How muchmoney is expected to be collected in October? a) $25,000 b) $15,000 c) $35,000 d) none of the above

Explanation / Answer

Sales collectionprocedure: 60% of sales collected in themonth of sales 30% sales will be collected in thenext month 10% sales will be collected after two months Auguest September October November 60% collection 10000*60% = 6000 20000*60% = 12000 30000*60% = 18000 40000*60% = 24000 30% collection 10000*30% =   3000 20000*30% =   6000 30000*30% =   9000 10% collection 10000*10% =   1000 20000*10% =    2000 Total of octobercollection=18000+6000+1000                                     = $25000 So, the answer will be (a) $25000

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