Coyote Loco, Inc., a distributor of salsa, has the following historical collecti

Question

Coyote Loco, Inc., a distributor of salsa, has the following historical collection pattern for its credit sales.

Compute the estimated total cash collections during the fourth quarter from sales made on account during the fourth quarter

Coyote Loco, Inc., a distributor of salsa, has the following historical collection pattern for its credit sales.

75 percent collected in the month of sale. 15 percent collected in the first month after sale. 5 percent collected in the second month after sale. 4 percent collected in the third month after sale. 1 percent uncollectible.

Explanation / Answer

cash collections during the fourth quarter from sales made on account during the fourth quarter

=235000*(75%+15%+5%)+260000*(75%+15%)+222500*75%

=624125

the above is the answer

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