Question

# Total sales for April, May, and June are \$900,000, \$700,000, and \$850,000 respectively. Cash sales are...

Total sales for April, May, and June are \$900,000, \$700,000, and \$850,000 respectively.
Cash sales are normally 30% of total sales.
Of the credit sales, 40% are collected in the same month as the sale, 55% are collected during the first month after the sale, and the remaining 5% are eventually not collected because of bad debts. All bad debts are written off by the end of the second month after the sale.

Compute the total amount of cash received during June, and the amount of accounts receivable outstanding at the end of June.

In June total sales = \$850,000

Cash sales = 850,000*30%= \$255,000

Credit sales = 850000-\$255000= \$595000

Cash collected from credit sales of June = \$595000*40%= \$238000

Cash collected from sale of may = \$700,000*70%*55%= \$269500

Total cash collected in June = \$255000+\$238000+\$269500= \$762500

Accounts receivable outstanding will be 60%of credit sale of June and 5 % of the sales of may. Because bad debts will be written off after second month of sale .

\$595000*60%= \$357000

700000*70%*5%=24500

Total outstanding will be \$357000+24500=\$ 381500

#### Earn Coins

Coins can be redeemed for fabulous gifts.

##### Need Online Homework Help?

Most questions answered within 1 hours.

##### Active Questions
• Hewitt Co. has 4,000 machine hours available to produce either Product 22 or Product 44. The...
• You evaluate 3 companies under the impact of an economic crisis on financing costs. The corporate...
• What is the maximum concentration og mg2+ that can exist in solution at pH 12? How...
• The three functions of money are to serve as: (1) a medium of exchange, (2) a...
• Selected financial statement information and additional data for Shaheen Co. is presented below. Prepare a statement...
• A proposed new project has projected sales of \$213,000, costs of \$95,000, and depreciation of \$25,800....