Question
In: Accounting
Smith Company started business on September 1. Smith had credit sales of $200,000 in September and...
Smith Company started business on September 1. Smith had credit sales of $200,000 in September
and $300,000 in October. The pattern for collection of cash from customers is expected to be 40%
in the month of sale (subject to a 2% cash discount), 50% in the month following the month of sale,
and 7% in the second month following the month of sale, with 3% uncollectible. How much cash
did Smith Company receive from customers on account during October?
Solutions
Expert Solution
Due to 2% discount – collection amount = Amount receivable x (100 - discount percentage)
The following table shows the calculations
Collection of 7% for second month following the sale will have no figure for October as sufficient data is not available (credit sales of August)
| Calculations | Particulars | September | October |
| A | Credit Sales | 200,000 | 300,000 |
| B = A x 40% | Collectable amount in month of sale | 80,000 | 120,000 |
| C = B x 98% | Net collection in month of sale | 78,400 | 117,600 |
| D = A of previous month x 50% | Collection in following month | - | 100,000 |
| E = C+D | Total cash collection from credit sales | 78,400 | 217,600 |
ekkarill92 answered 1 year agoRelated Solutions
Smith Company started business on September 1. Smith had credit sales of $200,000 in September and...
Smith Company started business on September 1. Smith had credit
sales of $200,000 in September and $300,000 in October. The pattern
for collection of cash from customers is expected to be 40% in the
month of sale (subject to a 2% cash discount), 50% in the month
following the month of sale, and 7% in the second month following
the month of sale, with 3% uncollectible. How much cash did Smith
Company receive from customers on account during October?.
Tausi Corporation, a company located in Tacoma, WA, started operations in September and had the following sales.
Tausi Corporation, a company located in Tacoma, WA, started operations in September and had the following sales.
SEP
OCT
NOV
DEC
JAN
FEB
Total Sales
$400,000
$520,000
$660,000
$900,000
$720,000
$700,000
30% of all sales are cash sales. The rest are credit sales. Credit sales are collected as follows: 20% in the month of sale, 70% in the month following sale, and 10% in the second month following sale. There are no bad debts
REQUIREMENTS: (Note: As long...
1. Smith Company had the following purchases and inventory levels during September. Use this data to...
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15 units at $20 each
September 10
Purchase
20 units at $25 each
September 20
Purchase
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September 30
Ending Inventory
30 units
a) $825
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c) 675
d) 600
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of...
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Units
Dollars
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$ 50,000
February
8,000
40,000
March
15,000
75,000
April
17,000
85,000
May
22,000
110,000
June
30,000
150,000
The company sells all items on account and expects collections
of accounts receivable to be as follows: 60% in the month of the
sale, and the remaining 40% in the month after the sale.
Required:
Compute...
The Sun Pacific Company budgeted the following sales: July 200,000 August 210,000 September
The Sun Pacific Company budgeted the following sales:
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200,000
August
210,000
September 190,000
Sales in May were 190,000 and in June 180,000. 60% of sales are
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Budgeted purchases of the required materials for production
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Direct Labor...
Colosimo Company started business on January 1, 2021. The company estimated that sales for the first...
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The company estimated that sales for the first six months would be
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Units
Dollars
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$ 72,000
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57,000
March
14,000
84,000
April
21,700
130,200
May
20,000
120,000
June
32,100
192,600
The company sells all items on account and expects
collections of accounts receivable to be as follows: 80% in the
month of the sale, and the remaining 20% in the month after the
sale.
Required:
Compute...
ABC Company started business on January 1, 20xx. The company estimated that sales for the first...
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Month
Units
Dollars
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10,000
$ 50,000
February
8,000
40,000
March
15,000
75,000
April
17,000
85,000
May
22,000
110,000
June
30,000
150,000
The company sells all items on account and expects
collections of accounts receivable to be as follows: 60% in the
month of the sale, and the remaining 40% in the month after the
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Required:
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March - 15,000 units, $90,000
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May - 22,000 units, $132,000
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The company sells all items on account and expects collections
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Smith Company sold merchandise in the amount of $5,800 to Batter Company on September 1, with...
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1)Lantz Company has provided the following information: Cash sales totaled $200,000. Credit sales totaled $480,000. Cash...
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Cash sales totaled $200,000.
Credit sales totaled $480,000.
Cash collections from customers for services yet to be provided
totaled $80,000.
A $16,000 loss from the sale of property and equipment
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Interest income was $7,800.
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Supplies expense was $300,000.
Rent expense for the store was $30,000.
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Other operating expenses totaled $70,000.
Unearned revenue was 4,900.
What is the amount of Lantz’s income before income taxes?...
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