Broad Cloth, Inc.'s average collection period is 15 days. The vice-president of marketing has projected credit sales of $2. million for October, $2.5 million for November and $3 million for December. Compute cash collections for November and December
Assume that all months have 30 days.
Answer:
November collections = last 50% of October + first 50% of November = .5(2,000,000) + .5(2,500,000) = $2,250,000.
December collections = last 50% of November + first 50% of December = .5(2,500,000) + .5(3,000,000) = $2,750,000.
Business
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