Problem
Schedule of Cash Collections of Accounts Receivable
Office World Inc. has "cash and carry" customers and credit customers. Office World estimates that 25% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 20% pay their accounts in the month of sale, while the remaining 80% pay their accounts in the month following the month of sale. Projected sales for the next three months of 2016 are as follows:
August $121,000
September 151,000
October 221,000
The Accounts Receivable balance on July 31, 2016, was $81,000.
Prepare a schedule of cash collections from sales for August, September, and October.