Lopez Company has a collection schedule of 60% during the month of sales, 15% the following month, and 15% subsequently

Finance Dec 09, 2020

Lopez Company has a collection schedule of 60% during the month of sales, 15% the following month, and 15% subsequently. The total credit sales in the current month of September were Php 80,000.00 and total collections in September were Php 57,000. What were the credit sales in July?

Expert Solution

Credit Sales in July should be equal to Php 30,000

15% of which is collected in September i.e. 30,000 *15% = 4500

15% of August month sale collected in September i.e. 30,000 *15% = 4500

Total of previous month's collected in september = 4500 +4500 = 9000

60% of September month sale collected in september i.e. 80,000 * 60% = 48000

Total Collection in September = 48000 + 9000 =57,000

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