I have the answer but need help with the solution. This is the scenario: Sales on account are collected over a 3 month period 10% collected in the month of sale, 70% collected in the month following sale, and 18% collected in the second month following sale. The remaiining 2% in uncollectible. The company maintains a minium cash balance of 5k. The sales are as followed:

July August September
6500.00 5250.00 7400.00 Cash sales

20,000.00 30,000.00 40,000.00 Sales on acct
-----------------------------------------
26,500.00 35250.00 47,400.00 Total sales

Question: Prepare a schedule of expected cash collections for Sept.
Answers:
July 3,600.00 August 21,000.00 Sept 4,000.00
I am having a difficult time figuring out the acct receivable for July and the equation for the answers. Thanks!:)

Sep's cash collections will be the sum of four amounts...

Sep's cash sales;
10% of Sep's credit sales (sales on account);
70% of Aug's credit sales;
18% of Jul's credit sales.

In fact, you've already noted those last three amounts in your question. Can you take it from here?

Sep's cash collections will be the sum of four amounts...

Sep's cash sales;
10% of Sep's credit sales (sales on account);
70% of Aug's credit sales;
18% of Jul's credit sales.

In fact, you've already noted those last three amounts in your question. Can you take it from here?

Thank you so much I got it!!

;)