Question
Coyote Loco, Inc., a distributor of salsa, has the following historical collection pattern for its credit sales. 70 percent collected in the month of sale.
Coyote Loco, Inc., a distributor of salsa, has the following historical collection pattern for its credit sales. |
70 percent collected in the month of sale. |
15 percent collected in the first month after sale. |
10 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 | $126,500 |
July | 154,000 |
August | 179,000 |
September | 208,000 |
October | 233,000 |
November | 258,000 |
December | 220,500 |
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. |
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Survey of Accounting
Authors: Carl S Warren
5th Edition
9780538489737, 538749091, 538489731, 978-0538749091
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