Question
Scottsdale Co. has actual sales for July and August and forecast sales for September, October, November, and December as follows: Actual: July $ 97,200 August
Scottsdale Co. has actual sales for July and August and forecast sales for September, October, November, and December as follows:
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Actual: |
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July | $ | 97,200 |
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August |
| 104,100 |
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Forecast: |
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September |
| 114,300 |
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October |
| 93,400 |
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November |
| 121,800 |
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December |
| 107,000 |
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Based on past experience, it is estimated that 23% of a months sales are collected in the month of sale, 54% are collected in the month following the sale, and 7% are collected in the second month following the sale.
Required:
Calculate the estimated cash receipts for September, October, and November.
Explanation:
| July |
| August |
| September |
| October |
| November | ||||||||||
Actual sales | $ | 97,200 |
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| $ | 104,100 |
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Sales forecast |
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| $ | 114,300 |
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| $ | 93,400 |
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| $ | 121,800 |
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Cash collections: |
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23% of sales made in the current month |
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| $ | 26,289 |
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| $ | 21,482 |
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| $ | 28,014 |
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54% of prior month's sale |
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| 56,214 |
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| 61,722 |
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| 50,436 |
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7% of second prior month's sales |
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| 6,804 |
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| 7,287 |
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| 8,001 |
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Total cash collections |
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| $ | 89,307 |
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| $ | 90,491 |
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| $ | 86,451 |
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