Davis Company Has Forecast Its Sales as Follows Davis Has Experienced Collections of 40% During the Month of August

question 69

Essay

Davis Company has forecast its sales as follows:
$\begin{array}{ll}\text { August } & \$ 180,00 \text { (actual) } \\\text { September } & \$ 280,000 \text { (actual) } \\\text { October } & \$ 360,000 \\\text { November } & \$ 400,000 \\\text { December } & \$ 450,000\end{array}$
Davis has experienced collections of 40% during the month of sale, 50% the month after the sale, and 10% the second month after the sale.
Required:
a. Prepare a schedule of cash receipts for the 3-month period October - December.
b. What will the Accounts Receivable balance be on December 31?

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Definitions:

Diminished Capacity

A legal defense where it is argued that a defendant was not fully able to understand their actions due to some form of mental impairment.

M'Naghten

A legal standard used to evaluate the criminal responsibility of a defendant claiming insanity, focusing on the ability to understand right from wrong at the time of the crime.

Durham

A city in North Carolina, known for its research universities and technological companies, or a historic city in Northeast England, famous for its Norman Cathedral.

Irresistible Impulse

A legal defense asserting that a defendant was unable to control their actions due to a mental illness, leading to a criminal act.