I need help with this please BMT 2100 Chapter 15 HW.doc [Compatibility Mode] - W

Question

I need help with this please

BMT 2100 Chapter 15 HW.doc [Compatibility Mode] - Word ERENCES MAILINGS REVIEW VIEW ACROBAT USA Apparel has forecast credit sales for the fourth quarter of the year as: September (actual) October (estimate) November (estimate) December (estimate) $50,000 40,000 35,000 60,000 Experience has shown that 20 percent of sales receipts are collected in the month of sale, 70 percent in the following month, and 10 percent are never collected. Prepare a schedule of cash receipts for USA Apparel covering the fourth quarter (October through December). For each of those three months, calculate the amount of cash the company expects to COLLECT from customers.

Explanation / Answer

20% of the sale are collected in the same month, so if we take october 20% of the sales of october would be collected in october itself. 70% of the sales are collected next month, i.e., 70% sales of september will be collected in october whereas the 70% of october sales will be collected in november. 10% are never collected or no cash receipt for 10% sales.

70% of sales of december, i.e., $42000 will be collected in January.

Cash Receipts Particulars October November December Estimated Sales $40000 $35000 $60000 Cash receipts 20% of sales of the sale of the same month $40000 x 20% = $8000 $35000 x 20% = $7000 $60000 x 20% = $12000 70% Sale of previous month $50000 x 70% = $35000 (September sales) $40000 x 70% = $28000 $35000 x 70% = $24500 Total Expected Collections $43000 $35000 $36500

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