Yeopay Plumbing Supply accepts bank charge cards and offers established plumbers charge accounts with terms of 1/eom,

Question:

Yeopay Plumbing Supply accepts bank charge cards and offers established plumbers charge accounts with terms of 1/eom, n/45. Yeopay’s experience is that 25 percent of its sales are for cash and bank credit cards. The remaining 75 percent are on credit. Of the cash sales, 40 percent pay cash and the remaining 60 percent pay with bank credit cards. Yeopay receives payments from the bank on credit card sales at the end of the day. However, Yeopay has to pay 3 percent for these services. An aging schedule for accounts receivable shows the following pattern on credit sales:

20 percent pay in the month of sale.

50 percent pay in the first month following the sale.

15 percent pay in the second month following the sale.

12 percent pay in the third month following the sale.

3 percent are never collected.

All accounts not paid by the end of the second month following the month of sale are considered overdue and are subject to 2 percent monthly late charge. Yeopay has prepared the following sales forecasts:

Sales Data	Amount	Breakdown of Cash/Bank Credit-Card Sales
June	$60,000	Cash sales	40%
July	$80,000	Bank credit-card sales	60%
August	$90,000	Bank processing fee	3%
September	$96,000	Collection of Credit Sales:
October	$88,000	Current month	20%
Sales Terms		1st month	50%
Cash and bank credit-card sales	25%	2nd month	15%
Credit sales	75%	3rd month	12%
Discount term	1%	Late charge/mo.	2%

Required

1. Prepare a schedule of cash receipts for September.

2. What is the appropriate accounting treatment for the bank service fees and the cash discounts allowed on collection of receivables?

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... Aging Schedule
Aging schedule is an accounting table that shows a company’s account receivables. It is an summarized presentation of accounts receivable into a separate time brackets that the rank received based upon the days due or the days past due. Generally...