Dacahr Bros., Inc., is an automobile maintenance and repair company with outlets
ID: 2389266 • Letter: D
Question
Dacahr Bros., Inc., is an automobile maintenance and repair company with outlets throughout the western United States. Henley Turlington, the company controller, is starting to assemble the cash budget for the fourth quarter. Projected sales for the quarter are as followsCredit Cash
Oct 457000 196800
Nov 590000 214000
Dec 720500 218400
Cash collection records pertaining to sales on account indicate the following collection pattern:
Month of sale 40%
First month following sales 30%
Second month following sales 28%
Uncollectible 2%
Sales on account during August were $346,000. During September, sales on account were $395,000.
Compute the amount of cash to be collected from customers during each month of the fourth quarter.
Total Cash Collected from Customers
October
November
December
Explanation / Answer
Cash
Aug
sales
Sept
sales
Oct
sales
Nov
sales
Dec
sales
Total
Oct
196800
96880
118500
182800
0
0
594980
Nov
214000
0
110600
137100
236000
0
697700
Dec
218400
0
0
127960
177000
288200
811560
Total
Answers:
October is 594,980
November is 697,700
December is 811,560
Total for all 3 months is 2,104,240t
The cash collections consist of the cash sales from that month, 40% of the credit sales from that month, 30% of the sales from the previous month, and 28% of the sales from the month before that. For example, October's cash collections include cash collections from October, 40% of October's credit sales,30% of September's Credit sales, and 28% of August's credit sales.
Cash
Aug
sales
Sept
sales
Oct
sales
Nov
sales
Dec
sales
Total
Oct
196800
96880
118500
182800
0
0
594980
Nov
214000
0
110600
137100
236000
0
697700
Dec
218400
0
0
127960
177000
288200
811560
Total
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