Flag As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000. The sales for January, February, and March of 2012 were as follows: $120,000, $140,000 and $150,000. 20% of each months sales are for cash. Of the remaining 80% (the credit sales), 60% are collected in the month of sale, with remaining 40% collected in the following month. What is the total cash collected (both from accounts receivable and for cash sales) in the month of february

Grackle Company

The total cash collected (both from accounts receivable and for cash sales) in the month of february is:

= $133,600.

Explanation:

a) Data and Calculations:

January 1, Accounts receivables = $50,000

January 2012, Sales = $120,000

February 2012, Sales = $140,000

March 2012, Sales = $150,000

                                   January       February       March

Sales                         $120,000    $140,000     $150,000

20% Cash Sales          24,000        28,000         30,000

80% Credit Sales        96,000        112,000       120,000

Cash Collections:

20% Cash Sales          24,000        28,000        30,000

60% month of sale     57,600         67,200        72,000

40% following month 50,000        38,400         44,800

Total collections      $131,600     $133,600     $146,800

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