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Kaspar Industries expects credit sales for January, February, and March to be $208,000, $264,600, and $316,500,...

Kaspar Industries expects credit sales for January, February, and March to be $208,000, $264,600, and $316,500, respectively. It is expected that 75% of the sales will be collected in the month of sale, and 25% will be collected in the following month.

Compute cash collections from customers for each month.

Credit Sales January Febuary March

January ________ _______ _________

Febuary _______ ________ _________

March _________ _________ __________

______________________________________________________________

__________ ___________ ___________

Business   Accounting   
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Answer #1
Collections from Customers
Credit Sales January February March
January $ 156,000.00 $    52,000.00
208000*0.75 208000*0.25
February
$ 198,450.00 $    66,150.00
264600*0.75 264600*0.25
March $ 237,375.00
316500*0.75
Total $ 156,000.00 $ 250,450.00 $ 303,525.00
To compute the cash collection for January, multiply the percentage of collection with the credit sales. Of the total credit sales of $208000 for the month of January, 75% is collected in the month of January. So, to compute the collection, multiply $208000 with 75%.
And remaining 25% of january month sales will be collected in the next month i.e., february
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