OfficeMart Inc. has \"cash and carry\" customers and credit customers. OfficeMar

Question

OfficeMart Inc. has "cash and carry" customers and credit customers. OfficeMart 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 are as follows: October $127,000 November 159,000 December 232,000 The Accounts Receivable balance on September 30 was $85,000. Prepare a schedule of cash collections from sales for October, November, and December. Round all calculations to the nearest whole dollar.

Explanation / Answer

. Prepare a schedule of cash collections from sales for October, November, and December. Round all calculations to the nearest whole dollar.

October November December Cash Sales 127000*20% = 25400 159000*20% = 31800 232000*20% = 46400 Collection from credit sales Account receivable 85000 October credit Sales 127000*80%*25% = 25400 127000*80%*75% = 76200 November credit Sales 159000*80%*25% = 31800 159000*80%*75% = 95400 December credit sales 232000*80%*25% = 46400 Total cash collection 135800 139800 188200

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

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