Question

​Thornton, Inc. has budgeted sales for the months of September and October at $304,000 and $286,000 ​, respectively. Monthly sales are ​20% credit and 80​% 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.

Answer 1

September Sales		3,04,000
Credit 20%		60,800
Out of 50% collected in following month i.e. October		30,400
October Sales		2,86,000
Cash 80%		2,28,800
(Collected in October)
Credit 20%		57,200
Out of 50% collected in October month		28,600
Cash Collection for month of October:
September Sales		30,400
October Sales		2,57,400
Total		2,87,800