All sales at Alaska Company are on credit. The company is preparing a cash budget for November.
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Question:
All sales at Alaska Company are on credit. The company is preparing a cash budget for November. The following information on accounts receivable collections is available from customer payment history:
Percent of current month’s sales collected this month | 30% |
---|---|
Percent of prior month’s sales collected this month | 60 |
Percent of sales two months prior to the current month collected this month | 5 |
Percent of sales three months prior to the current month collected this month | 3 |
The remaining 2 percent is not collected and is written off as bad debts. Sales to date are as follows:
November (estimated) | $ 370,000 |
---|---|
October | 410,000 |
September | 340,000 |
August | 480,000 |
Required:
What are the estimated cash receipts from accounts receivable collections in November?
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-1259565403
5th edition
Authors: William Lanen, Shannon Anderson, Michael Maher
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