Kettle Creek Foods budgets sales of November 250,000, December 280,000, January 300,000, February 360,000 and March 420,000. Customers pay 30 % in the month of sale, 60 % the following month and 10 % the month after that. Compute cash collections for January, February and March.
Kettle Creek Foods budgets sales of November 250,000, December 280,000, January 300,000, February 360,000 and March 420,000. Customers pay 30 % in the month of sale, 60 % the following month and 10 % the month after that. Compute cash collections for January, February and March.
Answer
January collections → 283000 · February collections → 316000 · March collections → 372000
Cells - January collections · ±0 - February collections · ±0 - March collections · ±0 January 0.3 × 300,000 + 0.6 × 280,000 + 0.1 × 250,000 = 283,000; February 0.3 × 360,000 + 0.6 × 300,000 + 0.1 × 280,000 = 316,000; March 0.3 × 420,000 + 0.6 × 360,000 + 0.1 × 300,000 = 372,000. Excel, with the months across row 2: =0.3*D2+0.6*C2+0.1*B2.
Hermanson Vol 2 ch 23; Bigel ch 8; OpenStax Finance ch 18