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(Question 36): Sparrow Co makes and sells construction materials and has some cash sales and some credit sales. Actual credit sales for the past four
(Question 36): Sparrow Co makes and sells construction materials and has some cash sales and some credit sales. Actual credit sales for the past four months were as follows: February 50,000, March 60,000, April 20,000, May 40,000. 20% of credit sales are expected to pay in the month of sale, 60% in the month after sale, 10% in the second month after sale and 10% are expected to be bad debts. Sparrow Co has budgeted that total sales in August will be $320,000, then $510,000 in September, $130,000 in October and $250,000 in November. 50% of sales are expected to be credit sales. Customers who pay in cash are given a 10% discount. Task 1: Calculate the amount of cash Sparrow Co should collect from credit sales in the month of May. Select one: a. $60,000 Ob. $40,000 O c. $50,000 O d. $26,000
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