Question 4 Fresplanade Co. had the following historical collection pattern for its credit sales: 75% collected...

Question 4

Fresplanade Co. had the following historical collection pattern for its credit sales:

75% collected in the month of sale
12% collected in the first month after month of sale
9% collected in the second month after month of sale
3% collected in the third month after month of sale
1% uncollectible

The sales on open account (credit sales) have been budgeted for the last six months of the year as shown below:


July	$	90,000
August	$	102,000
September	$	114,000
October	$	126,000
November	$	138,000
December	$	120,000

The estimated total cash collections by Fresplanade Co. during November from collection of accounts receivable is:

Multiple Choice

$131,940.
$120,060.
$177,300.
$154,800.
$121,320.

Fresplanade Co. had the following historical collection pattern for its credit sales:

75% collected in the month of sale
12% collected in the first month after month of sale
8% collected in the second month after month of sale
4% collected in the third month after month of sale
1% uncollectible

The sales on open account (credit sales) have been budgeted for the last six months of the year as shown below:


July	$	87,000
August	$	99,000
September	$	111,000
October	$	123,000
November	$	135,000
December	$	117,000

The estimated cash collection by Fresplanade Co. during August from July and August credit sales is:

Multiple Choice

$98,850.
$94,380.
$102,090.
$65,250.
$84,690.

Expert Solution



	November Sales Collection:
	November Sales (138000*75%)	103,500
	October Sales (126000*12%)	15,120
	September Sales (114000*9%)	10,260
	August Sales (102000*3%)	3,060


	Total Collection	131,940

	Answer is 131940/-


	August Sales Collection:
	August Sales (99000*75%)	74,250
	July Sales(87000*12%)	10,440




	Total Collection	84,690

	Answer is 84690/-

ekkarill92 answered 1 year ago

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