Fahrad Inc. sells all of its product on account. Fahrad has the following accounts receivable payment experience:
Percent paid in the month of sale .........10
Percent paid in the month after the sale ........64
Percent paid in the second month after the sale .....22
To encourage payment in the month of sale, Fahrad gives a 2 percent cash discount. Fahrad’s anticipated sales for the next few months are as follows:
April ......$220,000
May ....... 242,000
June ....... 253,000
July ........ 231,000
August ....... 275,000
Required:
1. Prepare a schedule of cash receipts for July.
2. Prepare a schedule of cash receipts for August.