Acc400 Accounting for Decision Making: E23.8 Budgeting Cash Receipts

Acc400 Accounting for Decision Making
Week 4 Assignment

E23.8 Budgeting Cash Receipts
Sales on account for the first two months of the current year are budgeted as follows:
January 800,000
February 880,000
All sales are made on terms of 2/10, n/30 (2% discount if paid in 10 days, full amount by 30 days); collections on accounts receivable are typically made as follows:
Collections within the month of sale:
Within discount period 70%
After discount period 10%
Collections within the month following sale:
Within discount period 12%
After discount period 6%
Returns, allowances, and uncollectibles 2%
Total 100%

Compute the estimated cash collections on accounts receivable for the month of February.
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