Answer:
$842,400
Explanation:
Given that,
Sales in April = $990,000
Sales in May = $1,090,000
Sales in June = $1,140,000
Cash sales = 20% of total sales
Of the credit sales,
35% are collected in the same month as the sale
60% are collected during the first month after the sale
5% are not collected.
Therefore, the cash received from credit sales during the month of June includes the 35% of the credit sales in the month of June and the 60% of the credit sales in the month of May.
Credit sales in June:
= 80% of the total sales in June (as 20% are the cash sales)
= 0.8 × $1,140,000
= $912,000
Credit sales in May:
= 80% of the total sales in May (as 20% are the cash sales)
= 0.8 × $1,090,000
= $872,000
Hence, the amount of cash received from credit sales during the month of June:
= 35% of the credit sales in the month of June + 60% of the credit sales in the month of May
= (0.35 × $912,000) + (0.6 × $872,000)
= $319,200 + $523,200
= $842,400
