Question

Aretes expects total sales of $699,500 for January and $355,000 for February. Assume that Aretes's sales are collected as follows:

60% in the month of the sale

20% in the month after the sale

17% two months after the sale

3% never collected

November sales totaled $392,000 and December sales were $400,000. Prepare a schedule of cash receipts from customers for January and February. Round answers to the nearest dollar. (If a bix is not used in the table leave the box empty; do not enter a zero)

CASH RECEIPTS FROM CUSTOMER

	January	February
Total Sales
Cash Receipts from Customer:
Nov.-Credit sales, collection of Nov. sales in Jan.
Dec.-Credit sales, collection of Dec. sales in Jan.
Dec.-Credit sales, collection of Dec. sales in Feb.
Jan.-Credit sales, collection of Jan. sales in Jan.
Jan.-Credit sales, collection of Jan. sales in Feb.
Feb.-Credit sales, collection of Feb. sales in Feb.
Total cash receipts from customers

Answer 1

SOLUTION

Schedule of cash receipts-

	January ($)	February ($)
Total sales	699,500	355,000
Cash Receipts from Customer:
Nov.-Credit sales, collection of Nov. sales in Jan. ($392,000*17%)	66,640
Dec.-Credit sales, collection of Dec. sales in Jan. ($400,000*20%)	80,000
Dec.-Credit sales, collection of Dec. sales in Feb. ($400,000*17%)		68,000
Jan.-Credit sales, collection of Jan. sales in Jan. ($699,500*60%)	419,700
Jan.-Credit sales, collection of Jan. sales in Feb. ($699,500*20%)		139,900
Feb.-Credit sales, collection of Feb. sales in Feb ($355,000*60%)		213,000
Total cash receipts from customers	566,340	420,900