Our sourdough bakery had sales of $598 in December. Projected sales for the next quarter are: January $1,173 February $1,387 March $1,652 Sales are 59% cash and the remainder on credit. Debtors pay in the month following the sale. Calculate total cash collected from sales for the month of February. Please enter your answer to 2 decimal places.
Question
Our sourdough bakery had sales of $598 in December.
Projected sales for the next quarter are:
January $1,173
February $1,387
March $1,652
Sales are 59% cash and the remainder on credit. Debtors pay in the month following the sale.
Calculate total cash collected from sales for the month of February. Please enter your answer to 2 decimal places.
Solution
To calculate the total cash collected from sales for the month of February, we need to consider both the cash sales in February and the credit sales in January (since debtors pay in the month following the sale).
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Calculate the cash sales for February: February sales = 1,387 * 59% = $818.33
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Calculate the credit sales for January that will be collected in February: January sales = 1,173 * 41% = $480.93
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Add the cash sales in February and the credit sales from January to get the total cash collected in February: Total cash collected in February = Cash sales in February + Credit sales in January Total cash collected in February = 480.93 = $1,299.26
So, the total cash collected from sales for the month of February is $1,299.26.
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