EA10.

LO 7.3Nonna’s Re-Appliance Store collects 55% of its accounts receivable in the month of sale and 40% in the month after the sale. Given the following sales, how much cash will be collected in February?

(As sales data is missing in question lets assume that sales made in January is 100,000 dollars and in February is 150,000 dollars. It is assumed that 5% of sales remain uncollected)

Cash collected in February amounts to $ 122,500

Explanation:

To calculatethe amount of cash received in the month of february two thing will be taken in consideration that is 40% of January sales and 55% of february sales.

Feb Cash

40% of Jan sales = 100,000 * 40% = $ 40,000

55% of Feb sales = 150,000 * 55% = $ 82,500

Total Cash = $ 122,500