Star Office Supplies Inc. has cash and carry customers and account customers. Star estimates that 40% of

Question:

Star Office Supplies Inc. has “cash and carry” customers and account customers. Star estimates that 40% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 20% pay their accounts in the month of sale, while the remaining 80% pay their accounts in the month following the month of sale. Projected sales for the first three months of 2006 are:
January ........ $200,000
February ...... 240,000
March ........ 225,000
The balance on December 31, 2005, was $150,000.
Prepare a schedule of cash collections from sales for January, February, and March.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...