Budgeting Cash Collections Lowell Consulting, which sells on terms 2/10, ?/30, h

Question

Budgeting Cash Collections Lowell Consulting, which sells on terms 2/10, ?/30, had credit sales for March and April of $195,000 and $162,500, respectively. Analysis of Lowell's operations indicates that the pattern of customers' payments on account is as follows (percentages are of total monthly credit sales) Receiving Discount 40% 15% Beyond Discount Period 20% 20% Totals In month of sale In month of following sale Uncollectible accounts, returns, and allowances 60% 35% 5% 100% Determine the estimated cash collected on customers' accounts in April.

Explanation / Answer

Discounted Other than Discounted Total Cash Collected from Sale of March 63,700 32,500 96,200 Cash Collected from Sale of April 28,665 39,000 67,665 Total Cash Received 1,63,865

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