Question

Please make sure the answer is correct 100% and to solve all parts clearly

Tiara Company has the following historical collection pattern for its credit sales: 70% collected in month of sale 15% collected in the first month after sale 10% collected in the second month after sale 4% collected in the third month after sale 1% uncollectible Budgeted credit sales for the last six months of the year follow. $ June 64,000 July 60,000 August 70,000 September 80,000 October 90,000 November 100,000 December 85,000 Required: Summarize your final answers in the attached table. A. What would be the estimated total cash collections during October from October credit sales? B. What would be the estimated total cash collections during October from September credit sales? C. What would be the estimated total cash collections during October from August credit sales? D. What would be the estimated total cash collections during October from July credit sales? E. Compute the estimated total cash collections during October from credit sales.

Answer 1

a) Total Cash collection during October from October credit sales = 90000*70% = 63000

b) Total Cash collection during October from September credit sales = 80000*15% = 12000

c) Total Cash collections during October from August Credit sales = 70000*10% = 7000

d) Total cash collection during October from July Credit sales = 60000*4% = 2400

e) Total Cash collection = 2400+7000+12000+63000 = 84400