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Erewon Inc. sells all of its product on account. Erewon has the following accounts receivable payment experience: Line Item Description Percent Percent paid in the
Erewon Inc. sells all of its product on account. Erewon has the following accounts receivable payment experience:
Line Item Description | Percent |
---|---|
Percent paid in the month of sale | 30 |
Percent paid in the month after the sale | 50 |
Percent paid in the second month after the sale | 18 |
To encourage payment in the month of sale, Erewon gives a 2% cash discount. The company's anticipated sales for the next few months are as follows:
Month | Amount |
---|---|
April | $190,000 |
May | 248,000 |
June | 260,000 |
July | 240,000 |
August | 300,000 |
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