McNally Inc s sells 25 of its goods for cash and
McNally Inc.’s sells 25% of its goods for cash and 75% on credit. The company’s Accounts Receivable collection pattern is 70% in the month of sale, 20% in the month after sale, and 10% in the second month after sale. The Accounts Receivable balance at May 31 is $234,600, of which $170,400 represents the remainder of May’s sales. There are no receivables prior to April. Total sales for June are expected to be $864,500.
Required:
(a) What were total sales for April?
(b) What were credit sales for May?
(c) What are projected cash collections for June?
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