Question

The Lumber Yard has projected the sales below for the next four months. The company collects 42 percent of its sales in the month of sale, 47 percent in the month following the month of sale, 9 percent two months after the month of sale, and never collects 2 percent of its sales. How much will the company collect in April?

	January			February			March			April
Sales	$	136,850		$	143,525		$	151,975		$	164,950

Answer 1

Sales in January = $136,850
Sales in February = $143,525
Sales in March = $151,975
Sales in April = $164,950

Company collects 42% in the month of sales, 47% in the following month and 9% in two months after the month of sale

Cash Collection in April = 42% * Sales in April + 47% * Sales in March + 9% * Sales in February
Cash Collection in April = 42% * $164,950 + 47% * $151,975 + 9% * $143,525
Cash Collection in April = $153,624.50

Therefore, the company will collect $153,624.50 or $153,625 in April