Question

In: Accounting

Rockers expects total sales of $ 701,000 for January and $351,000 for February Assume that Rockers​'s...

Rockers expects total sales of $ 701,000 for January and

$351,000 for February Assume that Rockers​'s sales are collected as​ follows:

60% in the month of the sale

30% in the month after the sale

7% two months after the sale

3% never collected

November sales totaled $397,000​, and December sales were $400,000.

Prepare a schedule of cash receipts from customers for January and February. Round answers to the nearest dollar.​

Solutions

Expert Solution

Solution:
Schedule of Cash Receipts from Customers
January February Total
Cash Receipts from Customers:
Nov. sales—7% collected in Jan. $27,790
Dec. sales—30% collected in Jan. $120,000
Dec. sales—7% collected in Feb. $28,000
Jan. sales—60% collected in Jan $420,600
Jan. sales—30% collected in Feb. $210,300
Feb. sales—60% collected in Feb. $210,600
Total cash receipts from customers $568,390 $448,900 $1,017,290
Working Notes:
Schedule of Cash Receipts from Customers
January February Total
Cash Receipts from Customers:
Nov. sales—7% collected in Jan. $27,790
[$397,000 x 7% = $27,790 ]
Dec. sales—30% collected in Jan. $120,000
[$400,000 x 30% = $120,000]
Dec. sales—7% collected in Feb. $28,000
[$400,000 x 7% = $28,000]
Jan. sales—60% collected in Jan $420,600
[$701,000 x 60% = $420,600]
Jan. sales—30% collected in Feb. $210,300
[$701,000 x 30% = $210,300]
Feb. sales—60% collected in Feb. $210,600
[$351,000x 60% = $210,600]
Total cash receipts from customers $568,390 $448,900 $1,017,290
Please feel free to ask if anything about above solution in comment section of the question.

ekkarill92 answered 1 year ago
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