Question

3. DEF Company’s forecasted sales are given below. On average, 50% of credit sales are collected...

3. DEF Company’s forecasted sales are given below. On average, 50% of credit sales are collected in the current quarter, 30% in the next quarter and 20% in the quarter after next. What are the expected total cash collections in quarters 3 and 4?

Quarter: 1 2 3   4

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Cash Sales    15 24 18 14

Sales on Credit 100 120 90 70

Business   Finance   
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Answer #1
Q-1 Q-2 Q-3 Q-4
Credit sale $ 100.00 $ 120.00 $   90.00 $   70.00
Credit sale collection
Q1-collected in Q3-20% $   20.00
Q2-collected in Q3-30% $   36.00
Q2-collected in Q4-20% $   24.00
Q3-collected in Q3-50% $   45.00
Q3-collected in Q4-30% $   27.00
Q4-collected in Q4-50% $   35.00
Cash sale $   18.00 $   14.00
Total collection (Cash + Credit sale) $ 119.00 $ 100.00
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