Matterhorn, Inc. had the following sales for the past six months. Matterhorn col

ID: 2635835 • Letter: M

Question

Matterhorn, Inc. had the following sales for the past six months. Matterhorn collects its credit sales 30% in the month of sale, 60% one month after the sale, and 10% two months after the sale.

Cash Sales Credit Sales

January $50,000 $50,000

February $70,000 $110,000

March $55,000 $95,000

April $78,000 $130,000

May $80,000 $105,000

June $75,000 $148,000

What are Matterhorn's total cash receipts for the month of March?

Explanation / Answer

Statement showing total Cash receipts for March Month

Particulars

Amount

Working Notes

Cash Sales for March Month

$55,000

Cash receipts in respect of Credit Sale for March Month(30%)

$28,500

$95,000*30%

Cash receipts in respect of Credit Sale for February Month(60%)

$66,000

$110,000*60%

Cash receipts in respect of Credit Sale for January Month (10%)

$5,000

$50,000*10%

Total

$154,500

Note: In March Month we will receive money for Cash Sale of March Month, 30% of credit sale of March Month(30% is received in same month), 60% of credit sale of February Month (60% is received one month after sale), and 10% of credit sale of January Month (10% is received one month after sale),.