Minot Corporation is preparing its cash budget for August. The following informa

Question

Minot Corporation is preparing its cash budget for August. The following information is available concerning its accounts receivable: $160,000 $ 123,000 Estimated credit sales for August Actual credit sales for July Estimated collections in August for credit sales in August Estimated collections in August for credit sales in July Estimated collections in August for credit sales prior to July Estimated write-offs in August for uncollectible credit sales Estimated provision for bad debts in August for credit sales in August 25% 70% 14.000 $ 5,000 $ 6,000 Required: What is the estimated amount of cash receipts from accounts receivable collections in August? Estimated cash receipts

Explanation / Answer

SOLUTION

Minot Corporation

Schedule of Cash Collections

For the Month Ended August 31

*July sales

= $123,000 * 70% = $86,100

** August sales

= $160,000 * 25% = $40,000

Amount ($) Collections in August for sales prior to July 14,000 July sales* 86,100 August sales** 40,000 Total cash collections 140,100

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