2. The treasurer of Yoda Inc. needs to estimate cash collections from accounts r

Question

2. The treasurer of Yoda Inc. needs to estimate cash collections from accounts receivable for September, October, and November 2017. Forty percent of the company’s customer’s pay in cash the rest are credit customers. The collection pattern for the credit customers is 20% in the month of the sale and 80% in the following month. They have zero uncollectible accounts. Estimated total sales are as follows:

August $78000
September 80,000
October. 95,000
November 91,000
Q: What is Yoda’s cash collections for September, October, and November? Q: The balance in accounts receivable will at the end of November will be:

Explanation / Answer

     Sept.          Oct.             Nov.

      Aug. credit sales (60% x $78,000 x 80%)             $37,440

      Sept. cash sales (40% x $80,000)                          $32,000

Sept. credit sales (60% x $80,000 x 20%)        $9,600

Sept. credit sales (60% x $80,000 x 80%) $38,400                   

      Oct. cash sales (40% x $95,000) $38,000

Oct. credit sales (60% x $95,000 x 20%) $11,400

Oct. credit sales (60% x $95,000 x 80%)                                               $45,600           

      Nov. cash sales (40% x $91,000) $36,400

Nov. credit sales (60% x $91,000 x 20%)      _______    _______ $10,920

Total collections                                                  $79,040     $87,800     $92,920

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.