Fill in the Blank QuestionFill in the blank question.A manufacturing company's sales budget indicates the following sales: January: $25,000; February: $30,000; March: $35,000. The company expects 70% of the sales to be on account and the remainder to be cash sales. Credit sales are collected in the month following the sale. The total cash collected during March will be $.
Question
Fill in the Blank QuestionFill in the blank question.A manufacturing company's sales budget indicates the following sales: January: 30,000; March: .
Solution 1
To answer this question, we need to calculate the cash collected from both cash sales in March and credit sales from February.
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First, calculate the cash sales for March. The company expects 70% of the sales to be on account (credit sales), so the remainder, which is 30%, will be cash sales.
March sales = 35,000 = $10,500
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Next, calculate the credit sales for February, which will be collected in March.
February sales = 30,000 = $21,000
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Finally, add the cash sales for March and the credit sales from February to get the total cash collected during March.
Total cash collected during March = Cash sales in March + Credit sales from February Total cash collected during March = 21,000 = $31,500
So, the total cash collected during March will be $31,500.
Solution 2
To answer this question, we need to calculate the cash collected from both cash sales in March and the credit sales from February.
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First, calculate the cash sales for March. The company expects 70% of the sales to be on account (credit sales), so the remaining 30% are cash sales. Multiply the total sales for March ($35,000) by 30% (or 0.30) to find the cash sales for March.
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Next, calculate the credit sales for February that will be collected in March. The company collects credit sales in the month following the sale. So, the credit sales from February will be collected in March. Multiply the total sales for February ($30,000) by 70% (or 0.70) to find the credit sales for February.
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Finally, add the cash sales for March and the credit sales from February to find the total cash collected during March.
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