The sales for October, November, and December are $2,000, $6,000 and $

The sales for October, November, and December are $2,000, $6,000 and $10,000, respectively. For any particular month of sales, the following percentages are received over time in cash for any given month:

20% in cash from that same month of sales; 50% in cash from the previous month’s sales; and 30% in cash from the sales from two months ago. What percentage of cash will be received during December compared to the sales for December?
What will be an ideal response?

ANSWER

Answer: Cash received during or by the end of December is: 0.2 × December Sales + 0.5 × November Sales + 0.3 × October Sales = 0.3 × $2,000 + 0.5 × $6,000 + 0.2 × $10,000 = $600 + $3,000 + $2,000 = $5,600. The percentage of cash received during December is $5,600 / $10,000 = 0.5600 or 56.00%.