Trapp Co.was organized on August 1 of the current year. Projectedsales for the n
ID: 2433836 • Letter: T
Question
Trapp Co.was organized on August 1 of the current year. Projectedsales for the next three months are as follows:
August
$100,000
September
185,000
October
225,000
The company expects to sell 40% of its merchandise forcash. Of the sales on account, one third are expected tobe collected in the month of the sale and the remainder in thefollowing month.
Prepare a schedule indicating cash collections of accountsreceivable for August, September, and October.
Trapp Co.was organized on August 1 of the current year. Projectedsales for the next three months are as follows:
August
$100,000
September
185,000
October
225,000
The company expects to sell 40% of its merchandise forcash. Of the sales on account, one third are expected tobe collected in the month of the sale and the remainder in thefollowing month.
Prepare a schedule indicating cash collections of accountsreceivable for August, September, and October.
Explanation / Answer
August
September
$100,000
$185,000
$225,000
$40,000
$74,000
$90,000
$60,000
$111,000
$135,000
$20,000
$37,000
$45,000
$40,000
$74,000
$60,000
$151,000
$209,000
August
September
October A.Projected Sales$100,000
$185,000
$225,000
B. Collection from Cash Sales 40%$40,000
$74,000
$90,000
C. Credit Sales$60,000
$111,000
$135,000
D. Collection from AccountsReceivables 1/3 in the month ofSales$20,000
$37,000
$45,000
2/3 in following month$40,000
$74,000
E. Total Collection (B + D)$60,000
$151,000
$209,000
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