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7 September, 21:19

Wells Company reports the following sales forecast: September, $55,000; October, $66,000; and November, $80,000. All sales are on account. Collections of credit sales are received as follows: 25% in the month of sale, 60% in the first month after sale, and 10% in the second month after sale. 5% of all credit sales are written off as uncollectible. Prepare a schedule of cash receipts for November.

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  1. 7 September, 21:44
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    Total = $65,100

    Explanation:

    Giving the following information:

    Wells Company reports the following sales forecast: September, $55,000; October, $66,000; and November, $80,000.

    Collections of credit sales are received as follows: 25% in the month of sale, 60% in the first month after sale, and 10% in the second month after sale. 5% of all credit sales are written off as uncollectible.

    Cash collection November:

    November = 80,000*0.25 = 20,000

    From October = 66,000*0.6 = 39,600

    From September = 55,000*0.10 = 5,500

    Total = $65,100
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