Sun Company has studied the collection pattern of sales for the past year and management has developed the following collection schedule:
55 percent in the month of sale with a 1 percent discount
30 percent in the month following the sale
15 percent in the second month following the sale
Actual sales for the past six months are:
January ........................................................ $ 200,100
February ...................................................... 220,450
March .......................................................... 300,700
April ............................................................ 251,200
May ............................................................. 275,890
June ............................................................. 180,460
Expected sales for the next six months are:
July .............................................................. $ 175,800
August ......................................................... 194,500
September ................................................... 186,300
October ....................................................... . 210,750
November ..................................................... 349,000
December ...................................................... 375,900
Required
A. Determine the expected cash receipts by month for July through September.
B. Determine the expected cash discounts by month for July through September.
C. Determine the expected ending balance of accounts receivable by month for July through September.