Question
Ewing Company is preparing a cash budget for September. The following information on accounts receivable collections is available from past collection experience: Percent of current
Ewing Company is preparing a cash budget for September. The following information on accounts receivable collections is available from past collection experience:
Percent of current months sales collected this month 25 %
Percent of prior months sales collected this month 55
Percent of sales two months prior to current month collected this month 8
Percent of sales three months prior to current month collected this month 8
The remaining 4 percent is not collected and is written off as bad debts. Credit sales to date are:
Septemberestimated $ 230,000
August 207,000
July 190,000
June 226,000
Required:
What are the estimated cash receipts from accounts receivable collections in September?
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