Camellia, a merchandising company, has provided the following extracts from their budget for the first quarter of the forthcoming year: Jan Feb March Sales (25% cash) $ 400 comma 000.00 $ 600 comma 000.00 $ 900 comma 000.00 The company collects 70% of credit sales in the same month and the balance in the next month. Calculate the collections from the customers for the month of February.

555 000 US$

Explanation:

                Cash sales(25%)                            Credit sales(75%)

January  (400,000*25%)=100000                    (400,000-100000)=300,000

February  (600,000*25%)=150,000            (600,000-150,000)=450,000

Customer collections to the month of February.

= $150,000 + ($450,000 * 0.7) + ($300,000*0.3)

(Balance collections = (100 - 70) = 30%)

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