Asked by Bethany Hinkle on May 10, 2024
Verified
The management of Ocean Industries estimates that credit sales for August September October and November will be $540000 $750000 $840000 and $480000 respectively. Experience has shown that collections are made as follows: In month of sale 25% In first month after sale 60% In second month after sale 10%\begin{array} { l l } \text { In month of sale } & 25 \% \\\text { In first month after sale } & 60 \% \\\text { In second month after sale } & 10 \%\end{array} In month of sale In first month after sale In second month after sale 25%60%10% Instructions
Determine the collections from customers in October and November. Show all computations.
Collections
The process of pursuing payment on debts owed by individuals or businesses, typically involving accounts receivable.
Credit Sales
Transactions where the buyer purchases goods or services on credit, agreeing to pay the seller at a later date, thus generating accounts receivable for the seller.
Monthly Sale
Financial transactions or revenue generated from sales within a particular month.
- Scrutinize and formulate cash budget projections, including foreseen cash inflows and outgoings.
- Acquire knowledge on the procedures for estimating incoming funds from sales and outgoing funds for expenses, taking into account their timing and quantities.
Verified Answer
GB
Learning Objectives
- Scrutinize and formulate cash budget projections, including foreseen cash inflows and outgoings.
- Acquire knowledge on the procedures for estimating incoming funds from sales and outgoing funds for expenses, taking into account their timing and quantities.