Explaining total cash collections


Q1) Wright Corporation started its operations on Sept. 1 of current year. Forecasted sales for first three months of business are $240,000, $300,000, and $420,000 respectively for Sept, Oct, and Nov. Company expects to sell 20% of those sales for cash and 80% on account. Of sales on account, 70% are expected to collected in month of sale, 25% in month following sale, and 5% in next month.

In November total cash collections will include which of given?

i) $9,600 that was sold in September.

ii) $60,000 that was sold in October.

iii) November cash sales of $84,000

iv) All of the above are expected to be part of November collections.

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Accounting Basics: Explaining total cash collections
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