Budgeting Cash Whitney's, Inc., sells on terms of 5% discount for "cash and carry" or 2/10, n/30 and estimates its total sales for the second calendar quarter of next year as follows: April, $750,000 May, $600,000 and june, $900,000. An analysis of operations indicates the following customer collection patterns: In month of sale Portion Total Sales Cash at time of sale 25% On account, during discount period 15% On account, after discount period 10% In month following sale On account, during discount period 20% On account, after discount period 10% In second month following sale On account, after discount period Average portion uncollectible 15% 5% 100% Prepare an estimate of the cash to be collected from customers during June. Estimated Collections from Customers in June April Sales On account, no discount May Sales 0 On account, no discount On account, with discount 0 June sales On account, no discount On account, with discount Cash Total estimated June collections Check 0 0 0 5 0

Budgeting Cash Whitney's, Inc., sells on terms of 5% discount for "cash and carry" or 2/10, n/30 and estimates its total sales for the second calendar quarter of next year as follows: April, $750,000 May, $600,000 and june, $900,000. An analysis of operations indicates the following customer collection patterns: In month of sale Portion Total Sales Cash at time of sale 25% On account, during discount period 15% On account, after discount period 10% In month following sale On account, during discount period 20% On account, after discount period 10% In second month following sale On account, after discount period Average portion uncollectible 15% 5% 100% Prepare an estimate of the cash to be collected from customers during June. Estimated Collections from Customers in June April Sales On account, no discount May Sales 0 On account, no discount On account, with discount 0 June sales On account, no discount On account, with discount Cash Total estimated June collections Check 0 0 0 5 0

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Budgeting Cash Collections Lowell Consulting, which sells on terms 2/10, n/30, had credit sales for March and April of $90,000 and $75,000, respectively. Analysis of Lowell's operations indicates that the pattern of customers' payments on account is as follows (percentages are of total monthly credit sales) In month of sale in month of following sale Uncollectible accounts, returns, and allowances Receiving Discount Beyond Discount Period Totals 20% 60% 20% 35% 5% 100% 40% 15% Determine the estimated cash collected on customers' accounts in April.
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NOT GRADED Budgeting Cash CollectionsSpencer Consulting, which invoices its clients on terms 2/10, n/30, had credit sales for May and June of $175,000 and $200,000, respectively. Analysis of Spencer's operations indicates that the pattern of customers' payments on account is as follows (percentages are of total monthly credit sales): Receiving Discount Beyond Discount Period Totals In month of sale 50% 20% 70% In month of following sale 15% 10% 25% Uncollectible accounts, returns, and allowances 5% 100% Determine the estimated cash collected on customers' accounts in June. $Answer
subject - accounting
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