The Accounts Receivable balance at January 1 2010 for formen
The Accounts Receivable balance at January 1, 2010, for formen Corp. was $512,100. Of that balance, $432,000 represents remaining Accounts Receivable from December billings. The normal collection pattern for the firm is 40 percent of billings in the month of sale, 45 percent in the month after sale, and 14 percent in the second month following sale. The remaining 1 percent of billings is uncollectible. January billings are expected to be $630,000.
(a) What were November billings for the company?
(b) What amount of December billings is expected to be uncollectible?
(c) What are projected January 2010 cash collections for the company?
(d) How can a company decrease the amount of uncollectible accounts it has? How, if at all, will these techniques impact the company’s total dollars of revenue?
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