Cash collections Miriam Irby is president of MICorp. Irby has decided to take a month's vaca- tionwith her family to South Africa, Zimbabwe, and Angola.Irby has researched the trip and determined that thetotal cost of the trip for her family will be approximately$50,000. Her travel agent says that a 10 percentdiscount can be obtained if Irby can write a check forthe cost of the trip by the end of November. Irby saysshe sees no problem in doing that given that thecompany's expected billings for October, November,and December, respectively, are $100,000, $65,000,and $15,000 (Irby will leave on vacation in December).As of September 30, MI Corp.'s accountant hasestimated cash collections from billings to be 15percent in the month of sale, 55 percent in the monthfollowing sale, and 30 percent in the second monthfollowing sale. The September 30 Accounts Receivablebalance is $11,000; that amount is expected to becollected in October. Average monthly business costsare $22,500. a. What are MI Corp.'s expected cashcollections for October, November, and December? b.Can Irby pay for her trip in November and obtain the 10percent discount? Explain. c. What would you suggestthat Irby do?

a. Expected Cash Collections for October, November, and December:To calculate the expected cash…

Answered: Cash collections Miriam Irby is…

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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