Problem - Coyote Loco is a manufacturer of salsa. The follow historical collection pattern cor its credit sales are as follows:
70% collected in month of sale
15% collected in first month after sale
10% collected in second month after sale
4% collected in third month after sale
1% uncollectible.
The sales on account have been budgeted for the last seven months as:
June - $122,500
July - 150,000
August - 175,000
Sept - 200,000
Oct - 225,000
Nov - 250,000
Dec - 212,500
1. Compute estimated cash collections during October from credit sales.
2. Compute the estimated total cash collections during the fourth quarter from sales made on account during the fourth quarter.
3. Make a spreadsheet solving the 2 previous requirements.