Duluth Company is preparing its cash budget for December. The following informat

Question

Duluth Company is preparing its cash budget for December. The following information is available concerning its accounts receivable:

Required:

What is the estimated amount of cash receipts from accounts receivable collections in December?

  Estimated credit sales for December $ 290,000   Actual credit sales for November $ 221,000   Estimated collections in December for credit sales in December 25 %   Estimated collections in December for credit sales in November 70 %   Estimated collections in December for credit sales prior to November $ 25,000   Estimated write-offs in December for uncollectible credit sales $ 9,000   Estimated provision for bad debts in December for credit sales in December $ 10,700

Required:

What is the estimated amount of cash receipts from accounts receivable collections in December?

Explanation / Answer

the estimated amount of cash receipts from accounts receivable collections in December

particulars Amount In $   Estimated collections in December for credit sales in December(290,000*25%)            72,500 Estimated collections in December for credit sales in November(221,000*70%)        154,700   Estimated collections in December for credit sales prior to November            25,000   Estimated write-offs in December for uncollectible credit sales                     -     Estimated provision for bad debts in December for credit sales in December                     -          252,200

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