The accounts receivable balance at the end of the previous q

The accounts receivable balance at the end of the previous quarter was $98,000 ($80,400 of which was uncollected December sales).

Compute the sales for November. (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Compute the sales for December. (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Compute the cash collections from sales for each month from January through March. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

Solution

a)

the account recievable balance at the end of previous quarter = 98000

af which 80,400 is from december

the acount recievable from november in january = 98000 - 80400 = 17,600

january is the second month after the sale of novemeber

so 10% of novemebr sales is collected in january

=>

sales for january = 17600/10% = $176,000 .......ans

b)

similarly

30% of december sales is collected in january

sales for december = 80400/30% = $268,000 ......ans

c)

cash collection of january = 10% * Novemeber sales + 30% * december sales + 60% * january sales

= 98000 + 60% * 139000

= $181,400 .........ans

cash collection of Febuary = 10% * December sales + 30% * January sales + 60% * febuary sales

= 10% * 268000 + 30% * 139000 + 60% * 156000

= $162,100 .........ans

Cash collection of March = 10% * January sales + 30% * Febuary sales + 60% * March sales

= 10% * 139000 + 30% * 156000 + 60% * 171000

= $163,300 .........ans