A company's history indicates that 20% of its total sales are for cash and the remaining 80% are on credit. Collections on credit sales are 30% in the month of the sale and 70% the following month. Projected total sales for January, February, and March are $150,000, $184,000 and $120,000, respectively. The expected cash receipts in March from sales are $155,840. True or False?
A company's history indicates that 20% of its total sales are for cash and the remaining 80% are on credit. Collections on credit sales are 30% in the month of the sale and 70% the following month. Projected total sales for January, February, and March are $150,000, $184,000 and $120,000, respectively. The expected cash receipts in March from sales are $155,840. True or False?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company's history indicates that 20% of its total sales are for cash and the remaining 80% are on credit. Collections on credit sales are 30% in the month of the sale and 70% the following month. Projected total sales for January, February, and March are $150,000, $184,000 and $120,000, respectively. The expected cash receipts in March from sales are $155,840.
True or False?
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