Question

Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit customers. OfficeMart estimates that 20% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 20% pay their accounts in the month of sale, while the remaining 80% pay their accounts in the month following the month of sale. Projected sales for the next three months are as follows: October $115,000 November 144,000 December 210,000 The Accounts Receivable balance on September 30 was $77,000. Prepare a schedule of cash collections from sales for October, November, and December. Round all calculations to the nearest whole dollar. OfficeMart Inc. Schedule of Cash Collections from Sales For the Three Months Ending December 31 October November December Receipts from cash sales: Cash sales $ $ $ September sales on account: Collected in October October sales on account: Collected in October Collected in November November sales on account: Collected in November Collected in December December sales on account: Collected in December Total cash receipts $ $ $

Answer 1

Ans:

schedule of cash collections from sales for October, November, and December.

	October	November	December
Receipts from cash sales:
Cash sales	23,000	28,800	42,000
September sales on account:
Collected in October	77,000	-	-
October sales on account:
Collected in October	18,400	-	-
Collected in November	-	73,600	-
November sales on account:
Collected in November	-	23,040
Collected in December	-	-	92,160
December sales on account:
Collected in December	-	-	33,600
Total cash collected	$118,400	$125,440	$167,760

working:

September amount of $77,000 will going to receive in October

OCTOBER

20% of 115,000 = 23,000 cash sale

remaining 80% = 92,000 is credit sale

then in credit sale 20% of 92,000 will be received in October itself for October sale and 80 % in November.

i.e $18,400 in October credit sale in October and $73,600 of October credit sale in November will be received..

and similarly is done for November and December