Question
Cash Collections Budget - Company A reports the following sales and collection information: Nov. Dec. Jan. Feb. Mar. Apr. Sales . . . $200,000 $325,000
Cash Collections Budget - Company A reports the following sales and collection information:
| Nov. | Dec. | Jan. | Feb. | Mar. | Apr. | |
| Sales . . . | $200,000 | $325,000 | $250,000 | $240,000 | $260,000 | $270,000 |
(a) Assume Company A collects 20% of its sales in the month of the sale, 50% the next month, 25% the following month, and 5% is never collected. Compute the company's cash collections for each month from January through April. (Include formulas used to solve problem).
Cash Collection Budget - Company B reports the following sales and collection information:
| Nov. | Dec. | Jan. | Feb. | Mar. | Apr. | |
| Sales . . . | $440,000 | $500,000 | $450,000 | $480,000 | $500,000 | $430,000 |
(b) Assume Company B collects 35% of its sales in the month of the sale, 40% the next month, 15% the following month, and 10% is never collected. Compute the company's cash collections for each month from January through April. (Include formulas used to solve problem).
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Misunderstanding Financial Crises Why We Donot See Them Coming
Authors: Gary B. Gorton
1st Edition
019992290X, 0199986886, 9780199922901, 9780199986880
