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    Real Deal Posts: 11, Reputation: 2
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    #1

    Apr 3, 2008, 05:28 PM
    Cash receipt/a/r
    Ellis Sport Shop projects the following sales:



    Ninety percent of Ellis' sales are on credit with 60 percent of receivables collected in the month after the sale and the rest of receivables collected in the second month after the sale. February sales were $60,000 and March sales were $70,000. In the past Ellis' bad debt percentage has been 0 and is expected to continue.
    (a) Prepare a monthly schedule of cash receipts for April-June.
    (b) What is the balance of Receivables at the end of June.


    Feb Mar April May June
    60,000 70,000 75,000 95,000 110,000
    60% 42,000 45,000 57,000

    40%2nd 24,000

    I figure my cash receipts to be $27,000
    Real Deal's Avatar
    Real Deal Posts: 11, Reputation: 2
    New Member
     
    #2

    Apr 5, 2008, 07:03 AM
    Ellis Sport Shop projects the following sales:



    Ninety percent of Ellis' sales are on credit with 60 percent of receivables collected in the month after the sale and the rest of receivables collected in the second month after the sale. February sales were $60,000 and March sales were $70,000. In the past Ellis' bad debt percentage has been 0 and is expected to continue.
    (a) Prepare a monthly schedule of cash receipts for April-June.
    (b) What is the balance of Receivables at the end of June.

    I have been working on this question and I am still puzzled.
    However this is were I am so far.
    I think I should start with 90%-60%-30%=10%cash does that sound correct
    Still not sure about what would be left for receivables

    So it would look something like this


    Feb Mar April May June
    60,000 70,000 75,000 95,000 110,000


    60% 42,000 45,000 57,500


    30% 18,000 21,000

    10% 7,000


    So does this look right. But what do I end up with rec'ables? Is it 10% of June sales?

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