Watt’s Lighting Stores made the following sales projection for the next six mont
ID: 2730003 • Letter: W
Question
Watt’s Lighting Stores made the following sales projection for the next six months. All sales are credit sales.
Sales in January and February were $47,000 and $46,000, respectively.
Experience has shown that of total sales, 5 percent are uncollectible, 40 percent are collected in the month of sale, 50 percent are collected in the following month, and 5 percent are collected two months after sale.
Of the sales expected to be made during the six months from March through August, how much will still be uncollected at the end of August? How much of the uncollected amount does the firm actually expect to collect? (Leave no cells blank - be certain to enter "0" wherever required.)
Watt’s Lighting Stores made the following sales projection for the next six months. All sales are credit sales.
Explanation / Answer
Answer a Monthly Cash Receipt Schedule Watt's Lighting Stores Cash Receipt Schedule January February March April May June July August Sep Oct Credit Sales $47,000.00 $46,000.00 $44,000.00 $50,000.00 $39,000.00 $48,000.00 $56,000.00 $58,000.00 Collections In month of sale $17,600.00 $20,000.00 $15,600.00 $19,200.00 $22,400.00 One month after sale $23,000.00 $22,000.00 $25,000.00 $19,500.00 $24,000.00 Two Months after sale $2,350.00 $2,300.00 $2,200.00 $2,500.00 $1,950.00 Total Cash Receipts $42,950.00 $44,300.00 $42,800.00 $41,200.00 $48,350.00 Answer b Watt's Lighting Stores Cash Receipt Schedule Month of sale Sales Uncollected % Uncollected Expect to Collect % Expect to Collect August $58,000.00 60% $34,800.00 55% $31,900.00 July $56,000.00 10% $5,600.00 5% $2,800.00 June $48,000.00 5% $2,400.00 0% $0.00 May $39,000.00 5% $1,950.00 0% $0.00 April $50,000.00 5% $2,500.00 0% $0.00 March $44,000.00 5% $2,200.00 0% $0.00 $49,450.00 $34,700.00
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