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.

Solutions

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 6 months ago

Next > < Previous

Related Solutions

Fresplanade Co. had the following historical collection pattern for its credit sales: 70% collected in the...

Fresplanade Co. had the following historical collection pattern for its credit sales: 70% collected in the month of sale 14% collected in the first month after month of sale 8% collected in the second month after month of sale 6% collected in the third month after month of sale 2% uncollectible The sales on open account (credit sales) have been budgeted for the last six months of the year as shown below: July $ 84,000 August $ 96,000 September $...

1. Plantsville makes all sales on account, subject to the following collection pattern: 30% are collected...

1. Plantsville makes all sales on account, subject to the following collection pattern: 30% are collected in the month of sale; 60% are collected in the first month after sale; and 10% are collected in the second month after sale. If sales for October, November, and December were $79,000, $69,000, and $59,000, respectively, what was the budgeted receivables balance on December 31? Multiple Choice $67,000. $41,300. $48,200. $49,300. None of the answers is correct. 2. Glastonbury Inc. began operations in...

Budgeting Vern's makes all sales on account, subject to the following collection pattern: 20% are collected...

Budgeting Vern's makes all sales on account, subject to the following collection pattern: 20% are collected in the month of sale; 70% are collected in the first month after sale; and 10% are collected in the second month after sale. Required: If sales for October, November and December were $171,662, $198,213, and $145,268, respectively, what was the budgeted receivables balance on December 31?

1. Coyote Loco, Inc., a distributor of salsa, has the following historical collection pattern for its...

1. Coyote Loco, Inc., a distributor of salsa, has the following historical collection pattern for its credit sales. 70 percent collected in the month of sale. 15 percent collected in the first month after sale. 10 percent collected in the second month after sale. 4 percent collected in the third month after sale. 1 percent uncollectible. The sales on account have been budgeted for the last seven months as follows: Coyote Loco, Inc., a distributor of salsa, has the following...

QUESTION 4 The following misstatements are sometimes found in the sales and collection cycle’s account balances...

QUESTION 4 The following misstatements are sometimes found in the sales and collection cycle’s account balances a. Several account receivables in the accounts receivable subsidiary ledger are not included in the aged trial balance b. cash received from collections of accounts receivable in the subsequent period is recorded as current period receipts c. the allowance for doubtful debts is inadequate because of the client’s failure to reflect the current downturn in the economy when determining the doubtful debts allowanced d....

q1: A company's past experience indicates that 60% of its credit sales are collected in the...

q1: A company's past experience indicates that 60% of its credit sales are collected in the month of sale, 30% in the next month, and 5% in the second month after the sale; the remainder is never collected. Budgeted credit sales were: January $300000 February 156000 March 480000 2:The cash inflow in the month of March is expected to be $334800. $226800. $349800. $288000. 3: A company has budgeted direct materials purchases of $200000 in July and $380000 in August....

95. Wichita Industries' sales are 10% for cash and 90% on credit. Credit sales are collected...

95. Wichita Industries' sales are 10% for cash and 90% on credit. Credit sales are collected as follows: 30% in the month of sale, 60% in the next month, and 10% in the following month. On December 31, the accounts receivable balance includes $32,000 from November sales and $42,000 from December sales. Assume that total sales for January and February are budgeted to be $70,000 and $140,000, respectively. What are the expected cash receipts for February from current and past...

All of Pocast Corporation's sales are on account. Sixty percent of the credit sales are collected...

All of Pocast Corporation's sales are on account. Sixty percent of the credit sales are collected in the month of sale, 30% in the month following sale, and 10% in the second month following sale. The following are budgeted sales data for the company: January February March April Total sales $ 700,000 $ 500,000 $ 400,000 $ 600,000 Cash receipts in April are expected to be: $530,000 $410,000 $460,000 $360,000

20. As of January 1, 2021, Farley Co. had a credit balance of $528,000 in its...

20. As of January 1, 2021, Farley Co. had a credit balance of $528,000 in its allowance for uncollectible accounts. Based on experience, 4% of Farley's credit sales have been uncollectible. During 2021, Farley wrote off $640,000 of accounts receivable. Credit sales for 2021 were $18,600,000. In its December 31, 2021, balance sheet, what amount should Farley report as allowance for uncollectible accounts? 21. As of January 1, 2021, Barley Co. had a credit balance of $537,000 in its allowance...

How does credit policy affect the CCC? How does collection policy influence sales, the collection period...

How does credit policy affect the CCC? How does collection policy influence sales, the collection period and the bad-debt loss percentage? How do profit potential and legal considerations affect a firm’s credit policy?

Subjects