Scottsdale Co. has actual sales for July and August and forecast sales for Septe

Question

Scottsdale Co. has actual sales for July and August and forecast sales for September, October, November, and December as follows Actual $ 98,800 105,400 Ul August Forecast September October November December 114.100 93,700 121,700 107,400 Based on past experience, it is estimated that 28% of a month's sales are collected in the month of sale, 50% are collected in the month following the sale, and 8% are collected in the second month following the sale Required Calculate the estimated cash receipts for September, October, and November Cash collections September October November

Explanation / Answer

Calculations Particulars July August September October November December A Sales    98,800    105,400        114,100    93,700       121,700      107,400 B = A x 28% Collection in month of sale    27,664      29,512          31,948    26,236         34,076         30,072 C = A of previous month x 50% Collection in month following sale             -        49,400          52,700    57,050         46,850         60,850 D = A of previous to previous month x 8% Collection in second month following sale             -                 -               7,904      8,432            9,128           7,496 E = B + C + D Estimated cash receipts    27,664      78,912          92,552    91,718         90,054         98,418

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