Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has \"cash a

Question

Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit customers. OfficeMart estimates that 25% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 20% pay their accounts in the month of sale, while the remaining 80% pay their accounts in the month following the month of sale. Projected sales for the next three months are as follows: October November December $124,000 155,000 227,000 The Accounts Receivable balance on September 30 was $83,000 Prepare a schedule of cash collections from sales for October, November, and December. Round all calculations to the nearest whole dollar OfficeMart Inc. Schedule of Cash Collections from Sales For the Three Months Ending December 31 October November December Receipts from cash sales: Cash sales September sales on account Collected in October October sales on account: Collected in October Collected in Navember November sales on account: Collected in November Collected in December December sales on account: Collected in December Total cash receipts

Explanation / Answer

oct nov Decmber Receipts from cash sales cash sales 31000 38750 56750 september sales on account collected in october 83,000 october sales on account collected in october (124000*75%*20%) 18600 collected in novemeber (124000*75%*80%) 74400 november sales on account collected in novemeber (155000*75%*20%) 23250 collected in december (155000*75%*80%) 93000 december sales on account collected in december (227000*75%*20%) 34050 total cash receipts 132600 141000 183800 Cash sale 25% Credit sale 75% 20% in the month of sale 80% in the following month

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