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

question 119

Essay

Davis Company has forecast its sales as follows:

$$\begin{array} { | l l | l | } \hline \text { August } & \$ 180,000 & \text { (actual) } \\\hline \text { September } & \$ 280,000 & \text { (actual) } \\\hline \text { October } & \$ 360,000 & \\\hline \text { November } & \$ 400,000 & \\\hline \text { December } & \$ 450,000 & \\\hline\end{array}$$ 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?