EX 21-18 Schedule of cash collections of accounts receivable Obj. 5 OfficeMart I

Question

EX 21-18 Schedule of cash collections of accounts receivable Obj. 5 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 custom- ers. 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 are as follows: d in 550 October November December $58,000 65,000 72,000 The Accounts Receivable balance on September 30 was $35,000. Prepare a schedule of cash collections from sales for October, November, and December.

Explanation / Answer

SCHEDULE OF CASH COLLECTIONS FROM SALES  

$ 16,200

PARTICULARS OCTOBER NOVEMBER DECEMBER Cash sales in current month $ 14,500 $ 16,250 $ 18,000 Cash collected from credit customers in current month $ 13,050 $ 14,625

$ 16,200

Cash collected from customers of previous month period $ 35,000 $ 30,450 $ 34,125 Total cash collected in the month $ 62,550 $ 61,325 $ 68,325

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