Farmerlands, Inc has budgeted sales for the months of September and October at $303,000 and $289,000, respectively
Monthly sales are 80% credit and 20% cash. Of the credit sales, 50% are collected in the month of sale, and 50% are collected in the following month. Calculate cash collections for the month of October.
A) $173,400
B) $297,400
C) $294,600
D) $181,800
C .C) Calculations of collections for the month of October:
Collections for October sales
(20% x $289,000 ) + (50% x 80% x $289,000 ) $173,400
Collections for September sales
(50% x 80% x $303,000 ) 121,200
Total collections for the month of October $294,600
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