PLEASE SHOW WORK OfficeMart Inc. has \"cash and carry\" customers and credit cus

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PLEASE SHOW WORK

OfficeMart Inc. has "cash and carry" customers and credit customers. OfficeMart estimates that 25% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 30% pay their accounts in the month of sale, while the remaining 70% pay their accounts in the month following the month of sale. Projected sales for the next three months of 2014 are as follows:

October November December $58,000 65,000 72,000 he Accounts Receivable balance on September 30, 2014, was $35,000 Hide Prepare a schedule of cash collections from sales for October, November, and December OfficeMart Inc. Schedule of Collections from Sales For the Three Months Ending December 31,2014 October November December Receipts from cash sales: Cash sales September sales on account: 14500 16250 18000 35000 Collected in October October sales on account: Collected in October 13050 Collected in November November sales on account: Collected in November 30450 14625 Collected in December December sales on account: Collected in December 34125 16200 Total cash collected 62550 61325 68325

Explanation / Answer

October November December Sales       58,000             65,000            72,000 25% cash sales       14,500 (58000*.25)             16,250 65000*.25            18,000 72000*.25 Credit sale       43,500 58000-14500             48,750            54,000 September account receivable       35,000 current month payment October credit sale: 43500       13,050 (43500*30%)             30,450 (43500*70%) November credit sale: 48750             14,625 48750*30%            34,125 48750*70% December credit sale: 54000            16,200 54000*30% Total cash collected       62,550 (14500+35000+13050)             61,325 (16250+30450+14625)            68,325 (18000+34125+16200)

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