During 2007, Tom Company actual sales on account for May and June and estimated

Question

During 2007, Tom Company actual sales on account for May and June and estimated sales on account for July, August and September are as follows: May (actual), $250,000; June (actual), $300,000; July (budgeted), $400,000; August, (budgeted) $600,000; and, September, (budgeted) $320,000. 25% of credit sales are collected in the month of sale, 70% in the following month, and 3% in the next following month.
How much cash may Tom expect to collect during July of 2007? $ __________

How much cash should Tom expect to collect during August of 2007? $ __________

How much cash should Tom expect to collect during September of 2007? $ __________

Please show your calculations below.

Explanation / Answer

July .03* 250,000+.70* 300,000+.25*400,000= 317,500 August .03* 300,000 +.70* 400,000+ 600,000*.25 =439,000 Sept .03*400,000+.70*600,000+.25*320,000= 512,000

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