Beta Company collects 80% of a month's sales in the month of sale and 20% of sales in the following month. What are the cash collections for October? August sales: $850 September sales: $900 October sales: $1,000 $890 $860 $980 $920

Beta Company collects 80% of a month's sales in the month of sale and 20% of sales in the following month. What are the cash collections for October? August sales: $850 September sales: $900 October sales: $1,000 $890 $860 $980 $920

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

Beta Company collects 80% of a month's sales in the month of sale and 20% of sales in the following month. What are the cash collections for October?

August sales: $850

September sales: $900

October sales: $1,000

$890
$860
$980
$920

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