Best Buy sales for any given month are 20% cash and 80% credit. Of the credit sales, half are collected the month after the sale and half are collected two months after the sale. When doing a February cash collections budget, which months need to be considered in your calculations?

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Best Buy sales for any given month are 20% cash and 80% credit. Of the credit sales, half are collected the month after the sale and half are collected two months after the sale. When doing a February cash collections budget, which months need to be considered in your calculations?

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Arias · Answer 1

To determine the cash collection for February, you have to consider the sales on account form previous months.

Explanation:

To determine the cash collection for February, you have to consider the sales on account form previous months.

Cash Collection February:

Sales in cash = ($X*0.2) =

Sales on account:

From January = ($X*0.8) * 0.5=

From December = ($X*0.8) * 0.5=

Total cash=