Joyner Company has the following historical collection pattern for its credit sa

Question

Joyner Company has the following historical collection pattern for its credit sales 70% collected in month of sale 15% collected in the first month after sale 10% collected in the second month after sale 4% collected in the third month after sale 1% uncollectible Budgeted credit sales for the last six months of the year follow July August September October November December $44,000 49,000 54,000 59,000 64,000 56,500 Required: A. Calculate the estimated total cash collections during October B. Calculate the estimated total cash collections during the year's fourth quarter. A. Total cash collections during October B. Total cash collections during the year's fourth quarter

Explanation / Answer

October November December Total Cash received from: July sales $44,000 x 4% = 1,760 1,760 August Sales $49,000 x 10% = 4,900 $49,000 x 4% = 1,960 6,860 September Sales $54,000 x 15%= 8,100 $54,000 x 10%= 5,400 $54,000 x 4%= 2,160 15,660 October Sales $59,000 x 70%= 41,300 $59,000 x 15%= 8,850 $59,000 x 10%= 5,900 56,050 November Sales $64,000 x 70%= 44,800 $64,000 x 15%= 9,600 54,400 December Sales $56,500 x 70%= 39,550 39,550 Total cash collection $56,060 $61,010 $57,210 $174,280 A. Total cash collection during October $56,060 B. Total cash collection during the year;s fourth quarter $174,280

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