Accounts Receivable Collections Esplanade Company’s credit sales have the following historical pattern:
70 percent collected in the month of sale 15 percent collected in the first month after month of sale 10 percent collected in the second month after month of sale 4 percent collected in the third month after month of sale 1 percent uncollectible |
The following sales on open account (credit sales) have been budgeted for the last six months in 2010:
July | $60,000 | October | 90,000 |
August | 70,000 | November | 100,000 |
September | 80,000 | December | 85,000 |
Required
1. Determine the estimated total cash collections from accounts receivable during October 2010.
2. Compute the estimated total cash collections during the fourth quarter from credit sales of the fourth quarter.
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