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Magazine Chapter 2: 17BP (page 116)
J. Lo鈥檚 Clothiers has forecast credit sales for the fourth quarter of the year:
September (actual) | \(70,000 |
Fourth Quarter | |
October | \)60,000 |
November | 55,000 |
December | 80,000 |
Experience has shown that 30 percent of sales are collected in the month of sale, 60 percent are collected in the following month, and 10 percent are never collected.
Prepare a schedule of cash receipts for J. Lo鈥檚 Clothiers covering the fourth quarter (October through December).
Short Answer
Schedule of cash receipts
September | October | November | December | |
Credit sales | $70,000 | $60,000 | $55,000 | $80,000 |
In month of sales @30% | 18,000 | 16,500 | 24,000 | |
One month after sales @ 60% | 42,000 | 36,000 | 33,000 | |
Total cash receipts | $60,000 | $52,500 | $57,000 |
Step by step solution
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