Coyote Loco, Inc., a distributor of salsa, has the following historical collection pattern for its credit sales.
Question:
Coyote Loco, Inc., a distributor of salsa, has the following historical collection pattern for its credit sales.
70 percent collected in the month of sale
15 percent collected in the first month after sale.
10 percent collected in the second month after sale.
4 percent collected in the third month after sale.
1 percent uncollectible.
The sales on account have been budgeted for the last seven months as follows:
June | $126,500 |
July | 154,000 |
August | 179,000 |
September | 208,000 |
October | 233,000 |
November | 258,000 |
December | 220,500 |
Required
1. Compute the estimated total cash collections during October from credit sales.
2. Compute the estimated total cash collections during the fourth quarter from sales made on account during the fourth quarter.
Managerial Accounting Creating Value in a Dynamic Business Environment
ISBN: 978-0078025662
10th edition
Authors: Ronald Hilton, David Platt