Blair is a retailer of assorted baby products. The sales forecast for the coming

Question

Blair is a retailer of assorted baby products. The sales forecast for the coming months is:

All sales are credit sales. The cash collection pattern is 25% in the month of sale, 65% in the month following the sale, and the remainder in the second month following the sale. Accounts receivable on June 1 were $171,000.

a. Prepare a cash receipts schedule for the period June through August (by month).



b. What will the Accounts Receivable balance be on August 31?

Revenues April (actual) $ 180,000 May (actual) $ 204,000 June $ 224,000 July $ 242,000 August $ 231,000

Explanation / Answer

a. Cash receipts Schedule for the period of June june july August Month of sale 56000 60500 57750 month following 132600 145600 157300 2nd month 18,000 20400 22,400 total collection 206600 226500 237450 b. Accounts receivable balance on august 31 july 242000*10% 24200 august 231000*75%= 173250 Accounts receivable balance on august 31 197450 answer

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