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The Guitar Shoppe reports the following sales forecast: August, $110,000; September, $190,000. Total sales includes 30% cash sales, 55% credit sales collected in the month following sale, and 15% credit sales written off as uncollectible. Prepare a schedule of cash receipts for September.

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  1. 11 April, 09:57
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    The correct answer is $117,500

    Explanation:

    According to the scenario, the given data are as follows:

    Sales for august = $110,000

    Sales for September = $190,000

    So, we can calculate the September cash receipts by using following formula:

    Cash receipt from August = $110,000 * 55% = $60,500

    Cash receipt from September = $190,000 * 30% = $57,000

    Total cash receipt for September = Cash receipt from August + Cash receipt from September

    = $60,500 + $57,000

    = $117,500
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