Schedule of Cash Collections of Accounts Receivable Office W

Schedule of Cash Collections of Accounts Receivable Office World Inc. has \"cash and carry\" customers and credit customers. Office World estimates that 20% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 25% pay their accounts in the month of sale, while the remaining 75% pay their accounts in the month following the month of sale. Projected sales for the next three months of 20Y4 are as follows: August $120,000 September 150,000 October 220,000 The Accounts Receivable balance on July 31, 20Y4, was $80,000.

Prepare a schedule of cash collections from sales for August, September, and October. Office World Inc. Schedule of Collections from Sales For the Three Months Ending October 31, 20Y4 August September October

Receipts from cash sales: Cash sales $ 24000 $ 30000 $ 44000

July sales on account:

Collected in August  

August sales on account:

Collected in August

Collected in September

September sales on account:

Collected in September

Collected in October

October sales on account:

Collected in October

Total cash receipts $ $ $

Solution

August September October Receipts from cash sales 24000 30000 44000 July sales on account: Collected in August   80000 August sales on account: Collected in August 24000 Collected in September 72000 September sales on account: Collected in September 30000 Collected in October 90000 October sales on account: Collected in October 44000 Total cash receipts 128000 132000 178000