Exercise 8.24 Schedule of Cash Receipts Del Spencer is the owner and founder of

Question

Exercise 8.24 Schedule of Cash Receipts Del Spencer is the owner and founder of Del Spencer's Men's Clothing Store. Del Spencer's has its own house charge accounts and has found from past experience that 10 percent of its sales are for cash. The remaining 90 percent are on credit. An aging schedule for accounts receivable reveals the following pattern: 15 percent of credit sales are paid in the month of sale 65 percent of credit sales are paid in the first month following the sale. 14 percent of credit sales are paid in the second month following the sale. 6 percent of credit sales are never collected. Credit sales that have not been paid until the second month following the sale are considered overdue and are subject to a 3 percent late charge. Del Spencer's has developed the following sales forecast: May June July August September $60,000 55,000 45,000 56,000 83,000 Required: Prepare a schedule of cash receipts for August and September.

Explanation / Answer

5840

(45000*90%*14%*1.03)

Sales amount % on credit % collectibles %w/late charges August September Cash sales 56000 83000 Received from sales in: June 55000 90% 14% 3% 7138 (55000*90%*14%*1.03) - July 45000 90% 65% - 26325 (45000*90%*65%) 45000 90% 14% 3%

5840

(45000*90%*14%*1.03)

August 56000 90% 15% - 7560 (56000*90%*15%) 56000 90% 65% - 32760 (56000*90%,65%) September 83000 90% 15% - 11205 (83000*90%*15%) Total cash receipts 46623 58105

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