***Please show all of your work when answering the question, thank you!*** Ellis
ID: 2671759 • Letter: #
Question
***Please show all of your work when answering the question, thank you!***
Ellis Sport Shop projects the following sales:
April: 75,000
May: 95,000
June: 100,000
Seventy percent of Ellis' sales are on credit with 60 percent of receivables collected in the month after the sale and the rest of receivables collected in the second month after the sale. February sales were $60,000 and March sales were $70,000. In the past Ellis' bad debt percentage has been 0 and is expected to continue.
a) Prepare a monthly schedule of cash receipts for April-June.
b) What is the balance of Receivables at the end of June?
***Please show all of your work when answering the question, thank you!****
Explanation / Answer
a.Cash Received in April =$75,000*30% + $70,000*70%*60% +$60,000*70%*40% = $68,700 Cash Received in May = $95,000*30% +$75,000*70%*60% +$70,000*70%*40% = $79,600 Cash Received in June =$100,000*30% + $95,000*70%*60% +$75,000*70%*40%= $90,900 b.balance of Receivables at the end of June = $100,000*70% +$95,000*70%*40% = $96,600
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