A company's past experience indicates that 60% of its credit sales are collected in the month of sale, 30% in the next month, and 5% in the second month after the sale; the remainder is never collected.Budgeted credit sales were: $\begin{array}{lr}
\text { January } & \$ 360,000 \
\text { February } & 216,000 \
\text { March } & 540,000
\end{array}$ The cash inflow in the month of March is expected to be
A)$406,800.
B)$307,800.
C)$324,000.
D)$388,800.

Question

Quizplus · Accepted Answer

60% of March sales are collected in March: $540,000 x 0.60 = $324,000.30% of February sales are collected in March: $216,000 x 0.30 = $64,800.Total cash inflow in March: $324,000 + $64,800 = $388,800.

A Company's Past Experience Indicates That 60% of Its Credit January $360,000 February 216,000 March 540,000\begin{array}{lr}\text { January } & \$ 360,000 \\\text { February } & 216,000 \\\text { March } & 540,000\end{array} January February March ​$360,000216,000540,000​

A Company's Past Experience Indicates That 60% of Its Credit $\begin{array}{lr}\text { January } & \$ 360,000 \\\text { February } & 216,000 \\\text { March } & 540,000\end{array}$