Question

Andrew Company sold goods to customers in 2017 at selling price of $1,800,000. 60% of the customers paid on account, and from these, the company collected 80% of amounts owing during 2017. How much cash was collected from customers in 2017?

a)$1,080,000

b)$1,584,000

c)None of the other answers is correct.

d)$864,000

Answer 1

Ans.	Option B $1,584,000
	*Calculations :
	*Credit sales = Total sales * 60%
	$1,800,000 * 60%
	$1,080,000
	*Cash sales = Total sales - Credit sales
	$1,800,000 - $1,080,000
	$720,000
	*Cash collected from credit sales = Credit sales * 80%
	$1,080,000 * 80%
	$864,000
	Schedule of Cash receipt In 2017
	Cash receipts from:
	Cash sales	$720,000
	Credit sales	$864,000
	Total cash collected from customers	$1,584,000