The cash collections in November areA) $317,750B) $389,750C) $490,000D) $410,000

Question

Michelle Karstensen · Accepted Answer

Final Answer : B, Explanation :  To calculate the cash collections in November, we consider cash sales (25% of November sales) and the collections from sales on account from both October and November. November sales are $410,000, so cash sales are 25% of that, which is $102,500. For sales on account in November (75% of $410,000), 70% collected in the same month equals $214,500 (70% of $306,000). From October's sales on account ($320,000 * 75% = $240,000), 30% collected in November equals $72,000. Adding these amounts ($102,500 + $214,500 + $72,000) gives us $389,000.

The cash collections in November are

A) $317,750
B) $389,750
C) $490,000
D) $410,000

Definitions

Learning Objectives

Learning Objectives

Related questions