# Question

Sales on account for the first two months of the current year are budgeted as follows:
Jan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \$700,000
Feb. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750,000
All sales are made on terms of 2/10, n/30 (2% discount if paid in 10 days, full amount by 30 days); collections on accounts receivable are typically made as follows:
Collections within the month of sale:
Within discount period ... . . . . . . . . . . . . . . . . . . . . . 60%
After discount period . . . . . . . . . . . . . . . . . . . . . . . . 15
Collections within the month following sale:
Within discount period . . . . . . . . . . . . . . . . . . . . . 15
After discount period . . . . . . . . . . . . . . . . . . . . . . . . 7
Returns, allowances, and uncollectibles . . . . . . . . . . 3
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 100%

Compute the estimated cash collections on accounts receivable for the month of February.

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