Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Coyote Loco, Inc., a distributor of salsa, has the following historical collection pattern for its credit sales. 60 percent collected in the month of sale.
Coyote Loco, Inc., a distributor of salsa, has the following historical collection pattern for its credit sales. |
60 percent collected in the month of sale. |
20 percent collected in the first month after sale. |
15 percent collected in the second month after sale. |
4 percent collected in the third month after sale. |
1 percent uncollectible. |
The sales on account have been budgeted for the last seven months as follows: |
June | $125,000 |
July | 152,500 |
August | 177,500 |
September | 205,000 |
October | 230,000 |
November | 255,000 |
December | 217,500 |
|
Required: | |
1. | Compute the estimated total cash collections during October from credit sales. |
2. | Compute the estimated total cash collections during the fourth quarter from sales made on account during the fourth quarter. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started