(Cash collections/accounts receivable) Edison Utilities is developing a forecast ofJune 1998 cash receipts from sales. Total sales...
Question:
(Cash collections/accounts receivable) Edison Utilities is developing a forecast ofJune 1998 cash receipts from sales. Total sales for June 1998 are expected to be $650,000. Of each month’s sales, 75 percent is expected to be on credit. The Accounts Receivable balance at May 31 is $171,000 of which $135,000 represents the remainder of May credit sales. There are no receivables from months prior to April 1998. Edison has an established collection pattern for credit sales of 60 percent in the month of sale, 25 percent in the month following the sale, and 15 percent in the second month following the sale. Edison has no uncollectible accounts.
a. What were total sales for April 1998?
b. What were credit sales for May 1998?
c. What are projected cash collections for June 1998?
d. What will be the balance of Accounts Receivable at June 30, 1998?
LO1
Step by Step Answer:
Cost Accounting Traditions And Innovations
ISBN: 9780538880473
3rd Edition
Authors: Jesse T. Barfield, Cecily A. Raiborn, Michael R. Kinney