Tardis offers a 3% discount to customers who pay cash at the time of sale and...
Tardis offers a 3% discount to customers who pay cash at the time of sale and a 2% discount to customers who pay within the first 10 days of the month after sale. Past experience shows that cash collections from customers tend to occur in the following pattern: Cash collected at time of sale 55% Collected within cash discount period in first 10 days of month after sale 15% Collected after cash discount period in first month after month of sale 10% Collected after cash discount period in second month after month of sale 15% Never collected 5% Compute the total cash budgeted to be collected in March if sales forecasts are $370,000 for January, $420,000 for February, and $460,000 for March.
Homework Answers
| March | ||
| Cash collected from March Sales net of 3% discount | $ 2,45,410 | =460000*55%*(100%-3%) |
| Cash collected from March Sales net of 2% discount | $ 67,620 | =460000*15%*(100%-2%) |
| Cash collected from February Sales without discount | $ 42,000 | =420000*10% |
| Cash collected from January Sales without discount | $ 55,500 | =370000*15% |
| Total Cash Collections | $ 4,10,530 |
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