Hiller corporation has the following sales forecasts for the selected three-month period in 2018: month sales july $24,000 august 14,000 september 16,000 all sales are on account. seventy percent of sales are collected in the month of the sale, and the remainder are collected in the following month. accounts receivable balance (july 1, 2018) $20,000 cash balance (july 1, 2018) 10,000 minimum cash balance is $10,000. cash can be borrowed in $1,000 increments from the local bank (assume no interest charges). how much cash would be collected in september from sales?

$15,400

Explanation:

Given

70% of sales are collected in the month of the sale, and the remainder are collected in the following month.

Considering the month of July with Accounts receivable balance (July 1, 2018) $20,000

Sales = $24,000

Cash collected = 20000 + (70% × 24000)

                         = 20000 + 16800

                         = $36,800

Account receivable balance (1 August, 2018)

= 30% × 24000

= $7,200

For the month of August

Sales = $14,000

Cash collected = 7200 + (70% × 14000)

                         = 7200 + 9800

                         = $17,000

Account receivable balance (1 September, 2018)

= 30% × 14000

= $4,200

For the month of September,

Sales = $16,000

Cash collected = 4200 + (70% × 16000)

                         = 4200 + 11200

                         = $15,400

The total cash collected from Sales which is made of 30% from the previous month's sales and 70% of September sales is $15,400

answernet income for 2017 will be greater if the inventory quantity declines;