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lookysee
Sep 28, 2011, 03:45 PM
Company A expects to begin operations on January 2012. The company expects
Sales in January 2012 to be $400,000 and increas in Feb. And March by 10%.
All sales are on account. McCarty expects to collect 70% of accounts receivable
In the month of sales, 20% in the month following the sale and 10%
In the second month following the sale. If receipts from February and March
Sales are extended to April and May, respectively, what are the total amounts of those
Receipts, in both April and May.

pready
Sep 28, 2011, 05:07 PM
For Jan take your $400,000 times 70%

For Feb take $400,000 times 110%, then times 70%. For Jan sales take $400,000 times 20%, then add the two amounts together.

For March take the amount of sales in Feb times 110%, then times 70%. For Jan sales take $400,000 times 10%. For Feb sales take your Feb sales from above times 20%, then add the three amounts together.

Finally add the total amounts calculated for Jan, Feb, and March together.

For April and May just continue what I did for March.