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Bruno Industries expects credit sales for January, February, and March to be $201,430, $267,600, and $319,700, respectively. It is expected that 75% of the sales will be collected in the month of sale, and 25% will be collected in the following month. Compute cash collections from customers for each month. (Round answers to 0 decimal places, e.g. 1525.) Collections from Customers Credit Sales January February March January $ $ $ February March $ $ $

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Answer:

Month incurred  Amount  January       February             March

                               $              $                    $                      $

January            201,430    151,072.50      50,357.50

February           267,600          -                  200,700         66,900              

March               319,700            -                       -                  239,775

                                           151,072.50         251,057.50     306,675

The collections for each month are:

January = $151,072.50

February = $251,057.50

March      = $306,675

Explanation:

The pattern of collection is that 75% of sales will be collected in the month of sales while 25% will be collected in the following month.

For instance, 75% of January sales ($151,072.50) will be collected in January while the remaining 25% ($50,357.50) will be collected in February. The same pattern applies to February and March.

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