Blooming Blossoms Ltd. sells flower seeds to retailers throughout the country. E
ID: 2463449 • Letter: B
Question
Blooming Blossoms Ltd. sells flower seeds to retailers throughout the country. Each pack of seeds sells for $.25. The company's accountant has prepared the following sales forecast (in packs) for the second quarter of the current year:
April.....35,000 packs
May......40,000 packs
June.....30,000 packs
Historically, the cash collection of the sales has been as follows: 25% in the month of sale, 60% in the month following sale, and 15% in the second month following the sale. Required: Compute the projected cash receipts for the month of June.
Explanation / Answer
cash receipts for June= (15% sale of Apr)+(60% of sale in May)+(25% of sale in Jun)
Sales in Apr=0.25*35000=$8,750
Sale in May=0.25*40000=$10,000
Sale in Jun=0.25*30000=$7,500
=(0.15*8750)+(0.6*10000)+(0.25*7500)=$9,187.5