Forward Company makes all its sales on account. Forward's accounts receivable payment experience is as follows:...

Forward Company makes all its sales on account. Forward's accounts receivable payment experience is as follows: Percent paid in the month of sale 30% Percent paid in the month after sale 65% Percent paid in the second month after sale 3% Forward provided information on sales as follows: September $120,000 October $140,000 November $220,000 December (expected) $260,000 ? What are the expected cash receipts in December? a. $210,400 b. $250,000 c. $225,200 d. $50,000 e. $179,000

Expert Solution

c. $225,200

Working:

	September	October	November	December	Total
Sales	1,20,000	1,40,000	2,20,000	2,60,000

Collection of :

September Sales	36,000	78,000	3,600		1,17,600
October Sales		42,000	91,000	4,200	1,37,200
November Sales			66,000	1,43,000	2,09,000
December Sales				78,000	78,000

Total	36,000	1,20,000	1,60,600	2,25,200	5,41,800

ekkarill92 answered 2 years ago

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