1. Cash at bank on 1 January 2021 amounted to R155 000. 2. Projected sales per quarter for 2021: First quarter R450 000 Second quarter R750 000 Third quarter R870 000 Fourth quarter R880 000 Sixty percent (60%) of the sales are for cash and forty percent (40%) are on credit. Cash customers are entitled to a 5% cash discount. 3. Collection of credit sales: • 55% of the credit sales are collected in the quarter of the sale. • 35% is collected in the following quarter and the balance is written off as a bad debt.
1. Cash at bank on 1 January 2021 amounted to R155 000. 2. Projected sales per quarter for 2021: First quarter R450 000 Second quarter R750 000 Third quarter R870 000 Fourth quarter R880 000 Sixty percent (60%) of the sales are for cash and forty percent (40%) are on credit. Cash customers are entitled to a 5% cash discount. 3. Collection of credit sales: • 55% of the credit sales are collected in the quarter of the sale. • 35% is collected in the following quarter and the balance is written off as a bad debt.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter8: Budgeting
Section: Chapter Questions
Problem 18E
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Question
Prepare the debtors collection period for the four quarters of 2021
![Information:
1. Cash at bank on 1 January 2021 amounted to R155 000.
2. Projected sales per quarter for 2021:
First quarter R450 000
Second quarter R750 000
Third quarter R870 000
Fourth quarter R880 000
Sixty percent (60%) of the sales are for cash and forty percent (40%) are on credit. Cash customers are
entitled to a 5% cash discount.
3. Collection of credit sales:
• 55% of the credit sales are collected in the quarter of the sale.
• 35% is collected in the following quarter and the balance is written off as a bad debt.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff8a7f5bf-b8f3-45d4-b7c6-ca7aa95900dc%2Fca038e05-279b-4323-a2d3-801610ad57ea%2F1ikuwdu_processed.png&w=3840&q=75)
Transcribed Image Text:Information:
1. Cash at bank on 1 January 2021 amounted to R155 000.
2. Projected sales per quarter for 2021:
First quarter R450 000
Second quarter R750 000
Third quarter R870 000
Fourth quarter R880 000
Sixty percent (60%) of the sales are for cash and forty percent (40%) are on credit. Cash customers are
entitled to a 5% cash discount.
3. Collection of credit sales:
• 55% of the credit sales are collected in the quarter of the sale.
• 35% is collected in the following quarter and the balance is written off as a bad debt.
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