Santelle Company expects August sales to be 30000 Approximat

Santelle Company expects August sales to be $30,000. Approximately 40% of sales are cash sales. Collection of credit sales are 50% in the month of sale, 40% in the month following sale and 5% two months following sale. The remaining 5% is uncollectible. ________ is the expected cash collection in August from August sales.

A) $9,000

B) $12,000

C) $21,000

D) $36,000

Answer: C

can you please explain to me how the answer is c?

Solution

Calculate expected cash collection in august from august sales :

so answer is c) $21000