Question 7

Chow Industries expects total sales for January, February, and March to be $300,000, $350,000, and $400,000 respectively. All sales are on credit. It expects to collect 60% of the sales in the month of sale and 35% in the following month. The company writes off the uncollectible sales in the 3rd month.

a) Compute the cash collections from customers for:

February: $____ March: $____

b) Compute the uncollectible sales / accounts receivable for:

March: $____ April: $____