# Solved Question: The cash sales and credit sales projected for sarahs kitchen are as follows

## Description

Question:

The cash sales and credit sales projected for sarahs kitchen are as follows:

January february march april may

cash 17,000 19640 16200 15380 17390

credit 40,000 42000 48000 50000 49500

if collections of credit sales are 70% the first month and 30% the second month, what would be the cash receipts for march, april, and May

 January February March April May Cash sales \$    17,000 \$            19,640 \$       16,200 \$     15,380 \$    17,390 Credit sales \$    40,000 \$            42,000 \$       48,000 \$     50,000 \$    49,500 Cash collected 70% – \$            28,000 \$       29,400 \$     33,600 \$    35,000 Cash collected 30% \$       12,000 \$     12,600 \$    14,400 Total Cash Collected \$       57,600 \$     61,580 \$    66,790

Cash receipt for March = Cash sales on March + 70 % credit sales of February + 30% credit sales of January

= \$ 16,200 + (0.7 x \$ 42,000) + (0.3 x 40,000)

= \$ 16,200 + \$ 29,400 + \$ 12,000 = \$ 57,600

Cash receipt for April = Cash sales on April + 70 % credit sales of March + 30% credit sales of February

= \$ 15,380 + (0.7 x \$ 48,000) + (0.3 x 42,000)

= \$ 15,380 + \$ 33,600 + \$ 12,600 = \$ 61,580

Cash receipt for May = Cash sales on May + 70 % credit sales of April + 30% credit sales of March

= \$ 17,390 + (0.7 x \$ 50,000) + (0.3 x 48,000)

= \$ 17,390 + \$ 35,000 + \$ 14,400 = \$ 66,790

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