Im a little confused on this. Can someone help please?

[jgluse7]

Wright Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $230,741, $312,935, and $423,809, respectively, for September, October, and November. The company expects to sell 20% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale, 25% in the month following the sale, and the remainder in the following month. The cash collections in September from accounts receivable are:

How would you do this? Because I have no idea how to.

 

[lkroft]

Wright Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $230,741, $312,935, and $423,809, respectively, for September, October, and November. The company expects to sell 20% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale, 25% in the month following the sale, and the remainder in the following month. The cash collections in September from accounts receivable are:

How would you do this? Because I have no idea how to.

I am not sure if you already figured this out - but thought I would reply just in case. Your question is basing total sales off of anticipated budgeted sales.

So for the month of September:

Total Sales = $230,741
Sales made with cash = $230,741 * 20% = $46,148.20
Sales in A/R = $230,741 * 80% = $184,592.80
Of the total sales in A/R for September 70% of expected to be collected in the same month = $184,592.80 * 70% = $129,214.96

Your questions asks what the cash collection in September for A/R would be. They are equal to $129,214.96.