Cash Collections
XYZ Company collects payment on 50 percent of credit sales in the month of sale, 40 percent in the month following sale, and 5 percent in the second month following the sale. Its sales budget is as follows:
|
Month |
Cash Sales |
Credit Sales |
|
May |
$20,000 |
$ 40,000 |
|
June |
40,000 |
60,000 |
|
July |
60,000 |
80,000 |
|
August |
80,000 |
100,000 |
Compute XYZ Company’s total cash collections in July and its total cash collections in August.