September (actual) $50,000 October (estimate) 40,000 November (estimate) 35,000

Question

September (actual)             $50,000

October (estimate)              40,000

November (estimate)          35,000

December (estimate)          60,000

Experience has shown that 20 percent of sales receipts are collected in the month of sale, 70 percent in the following month, and 10 percent are never collected.

Prepare a schedule of cash receipts for USA Apparel covering the fourth quarter (October through December). For each of those three months, calculate the amount of cash the company expects to COLLECT from customers.

Explanation / Answer

Hi,

Please find the detailed answer as follows:

Schedule of Cash Receipts:

Notes:

September Sales Collected in October = 50000*70% = 35000

October Sales Collected in October = 40000*20% = 8000

October Sales Collected in Novemberr = 40000*70% = 28000

November Sales Collected in November = 35000*20% = 7000

November Sales Collected in December = 35000*70% = 24500

December Sales Collected in December = 60000*20% = 12000

Thanks.

October November December September 35000 0 0 October 8000 28000 0 November 0 7000 24500 December 0 0 12000 Total Expected Collections from Customers 43000 35000 36500

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