Question
Office World Inc. has cash and carry customers and credit customers. Office World estimates that 20% of monthly sales are to cash customers, while the
Office World Inc. has "cash and carry" customers and credit customers. Office World estimates that 20% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 20% pay their accounts in the month of sale, while the remaining 80% pay their accounts in the month following the month of sale. Projected sales for the next three months of 2014 are as follows:
August | $116,000 |
September | 145,000 |
October | 212,000 |
The Accounts Receivable balance on July 31, 2014, was $78,000.
Prepare a schedule of cash collections from sales for August, September, and October.
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