Question
A Corporation has the following sales budget for the last six months of 2020: July $200,000 October $180,000 August 160,000 November 200,000 September 220,000 December
A Corporation has the following sales budget for the last six months of 2020:
July | $200,000 | October | $180,000 |
August | 160,000 | November | 200,000 |
September | 220,000 | December | 188,000 |
Historically, the cash collection of sales has been as follows:
65 percent of sales collected in the month of sale,
25 percent of sales collected in the month following the sale,
8 percent of sales collected in the second month following the sale, and
2 percent of sales is uncollectible.
What is the ending balance of accounts receivable at the end of September assuming the uncollectible balance is written off in the third month after the sale?
I've seen answers that match similar questions above. Why in problem-solving August sales (160,000*10%) = 16000 September sales (220,000*35%) =777000
Total 93,000
Where did 35% and 10% come from?
Or is there another way to solve the problem?
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