mehta_rutvi14
Jan 25, 2009, 05:47 AM
Cash Collections. The following data are given for Erich From Stores:
Sept, Actual Oct, Actual Nov, Actual Dec, Actual
Cash Sales $7000 $6000 $8000 $6000
Credit Sales $50000 $48000 $62000 $80000
Total Sales $57000 $54000 $70000 $86000
Past experience indicates net collections normally occur in the following pattern: No collections are made in the month of sale, 80% of the sales of any month are collected in the following month, 19% of sales are collected in the second following month, and 1% of sales are uncollectible.
Compute (a) total cash receipts for Nov and Dec, and (b) accounts receivable balance at Nov 30, if the Oct 31 balance is $50000.
Sept, Actual Oct, Actual Nov, Actual Dec, Actual
Cash Sales $7000 $6000 $8000 $6000
Credit Sales $50000 $48000 $62000 $80000
Total Sales $57000 $54000 $70000 $86000
Past experience indicates net collections normally occur in the following pattern: No collections are made in the month of sale, 80% of the sales of any month are collected in the following month, 19% of sales are collected in the second following month, and 1% of sales are uncollectible.
Compute (a) total cash receipts for Nov and Dec, and (b) accounts receivable balance at Nov 30, if the Oct 31 balance is $50000.