**Ratchet Manufacturing Sales Calculation**Ratchet Manufacturing anticipates total sales for August, September, and October of $300,000, $260,000, and $270,500 respectively. Cash sales are normally 20% of total sales, and the remaining sales are on credit. All credit sales are collected in the first month after the sale. Compute the amount of cash received for September.**Multiple Choice Options:**- $240,000- $292,000- $208,000- $112,000- $448,000**Explanation:**To calculate the cash received for September, consider the following steps:1. **Calculate Cash Sales for September:** - Total sales in September: $260,000 - Cash sales (20% of total): $260,000 x 0.20 = $52,000 2. **Calculate Credit Sales from August Collected in September:** - Total sales in August: $300,000 - Credit sales from August (80% of total): $300,000 x 0.80 = $240,0003. **Total Cash Received in September:** - Cash sales from September + Credit sales from August - Total: $52,000 + $240,000 = $292,000The amount of cash received in September is therefore **$292,000**.

Formula: Cash collection amount = Sales value x Cash collection ratioCash received for September: = ( Credit sales of August month 80 % collected in September month ) + (Cash sales of September month 20 % ) = ( 300000 x 80 % ) + ( 260000 x 20 % ) = 240000 + 52000 = $ 292000 Correct choice is $ 292000

Business

Accounting

Ratchet Manufacturing anticipates total sales for August, September, and October of $300,000, $260,000, and $270,500 respectively. Cash sales are normally 20% of total sales and the remaining sales are on credit. All credit sales are collected in the first month after the sale. Compute the amount of cash received for September. Multiple Choice $240,000. $292,000. $208,000.

Ratchet Manufacturing anticipates total sales for August, September, and October of $300,000, $260,000, and $270,500 respectively. Cash sales are normally 20% of total sales and the remaining sales are on credit. All credit sales are collected in the first month after the sale. Compute the amount of cash received for September. Multiple Choice $240,000. $292,000. $208,000.

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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