Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has \"cash a

Question

Schedule of Cash Collections of Accounts Receivable

OfficeMart Inc. has "cash and carry" customers and credit customers. OfficeMart estimates that 30% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 20% pay their accounts in the month of sale, while the remaining 80% pay their accounts in the month following the month of sale. Projected sales for the next three months are as follows:

The Accounts Receivable balance on September 30 was $88,000.

Prepare a schedule of cash collections from sales for October, November, and December. Round all calculations to the nearest whole dollar.

October $131,000 November 164,000 December 240,000

Explanation / Answer

Prepare a schedule of cash collections from sales for October, November, and December. Round all calculations to the nearest whole dollar.

October November December Receipts from cash sales: 39300 49200 72000 Cash sales September sales on account: Collected in October 88000 October sales on account: Collected in October 18340 Collected in November 73360 November sales on account: Collected in November 22960 Collected in December 91840 December sales on account: Collected in December 33600 Total cash receipts 145640 145520 197440

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