All sales of Taylor's Jeans and Uniforms (TJU) are made on credit. Sales are billed twice monthly, on the fifth of the month for the last half of the prior month's sales and on the twentieth of the month for the first half of the current month's sales. For accounts paid within the first 10 days after the billing date,

TJU gives customers a 2% discount; otherwise the full amount is due within 30 days of the billing date, and customers that do not pay within the 10-day discount period generally wait the full 30 days before making payment. Based on past experience, the collection experience of accounts receivable is:

TJU's average markup on its products is 35% of the sales price. TJU purchases merchandise for resale to meet the current month's sales demand and to maintain a desired monthly ending inventory of 30% of the next month's cost of goods sold. All purchases are on credit. TJU pays for one-half of a month's purchases in the month of purchase and the other half in the month following the purchase. All sales and purchases occur uniformly throughout the month.

Sales for May 20 x 8 were 760,000. The forecast sales for the next 4 months are

June 920000

July 1040000

August 900000

September 720000

Within the 10 day discount period 85%

At 30 Day after billing 14%

Uncollectible 1%

Requirement 

1. How much cash can TJU plan to collect from accounts receivable collections during July 20X8?

July collections
Total July collections

Answer rating: 100% (QA)

INVIE WHIH IS MDE IN JUNE SME YMENT MDE IN JUNE ND SME YMENT WILL BE IN ... View the full answer