Need to see all work, thank you! Esplande Company\'s credit sales have the follo

Question

Need to see all work, thank you! Esplande Company's credit sales have the following historical pattern: 70 percent collected in the month of the sale 15 percent collected in the first month after the month of the sale 10 percent collected in the second month after month of sale 4 percent collected in the third month after month of sale 1 percent uncollectible The following sales on open account (credit sales) have been budgeted for the last six months in 2010: July $60,000 August $70,000 September $80,000 October $90,000 November $100,000 December $85,000 1. Determine the estimated total cash collections from accounts recievable durning october 2010. 2. Compute the estimated total cash collections during the fourth quarter from credit sales of the fourth quarter.

Explanation / Answer

total cash collections during the October. =0.7(90000) +0.15(80000) +0.1(70000) +0.04(60000) = 63000+12000+7000+2400 = $84400 estimated total cash collections during the fourth quarter from credit sales of the fourth quarter In october = 84400 In November = 0.7(100000) +0.15(90000) +0.1(80000) + 0.04(70000) = 70000 + 13500 + 8000 + 2800 = $94300 In December = 0.7(85000) + 0.15(100000) + 0.1(90000) + 0.04(80000) = 59500 + 15000 + 9000 + 3200 = $86700 total cash collections during the fourth quarter = 84400 + 94300 + 86700 = $265400

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