Question 4
Fresplanade Co. had the following historical collection patternfor its credit sales:
75% collected in the month of sale
12% collected in the first month after month of sale
9% collected in the second month after month of sale
3% collected in the third month after month of sale
1% uncollectible
The sales on open account (credit sales) have been budgeted for thelast six months of the year as shown below:
| | | |
| July | $ | 90,000 | |
| August | $ | 102,000 | |
| September | $ | 114,000 | |
| October | $ | 126,000 | |
| November | $ | 138,000 | |
| December | $ | 120,000 | |
|
The estimated total cash collections by Fresplanade Co. duringNovember from collection of accounts receivable is:
Multiple Choice
$131,940.
$120,060.
$177,300.
$154,800.
$121,320.
Fresplanade Co. had the following historical collection patternfor its credit sales:
75% collected in the month of sale
12% collected in the first month after month of sale
8% collected in the second month after month of sale
4% collected in the third month after month of sale
1% uncollectible
The sales on open account (credit sales) have been budgeted for thelast six months of the year as shown below:
| |
| July | $ | 87,000 | |
| August | $ | 99,000 | |
| September | $ | 111,000 | |
| October | $ | 123,000 | |
| November | $ | 135,000 | |
| December | $ | 117,000 | |
|
The estimated cash collection by Fresplanade Co. during Augustfrom July and August credit sales is:
Multiple Choice
$98,850.
$94,380.
$102,090.
$65,250.
$84,690.
