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The following forecasted sales pertain to Cordon Corporation: Month Sales September $40,000 October 50,000 November 30,000 December 20,000 Collection pattern: 65 percent in month of sale 35 percent in month following sale Accounts receivable as of August 31 Finished goods inventory as of August 31 Cordon Corporation has a selling price of $2
The following forecasted sales pertain to Cordon Corporation:
Month Sales September $40,000 October 50,000 November 30,000 December 20,000
Collection pattern: 65 percent in month of sale 35 percent in month following sale
Accounts receivable as of August 31 Finished goods inventory as of August 31
Cordon Corporation has a selling price of $2.50 per unit and expects to maintain el
Refer to Figure 8-5. How many dollars are expected to be collected in September? A. $7,000 B. $40,000 c, $33,000 D. $21.000
Expert Solution
Answer
C .
Explanation
Computation of Expected Cash Collection in September:
65% of September Sales ($40,000*65%) = $26,000
Account Receivables as of August 31 = $7,000
Expected Cash Collection in September = $33,000
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