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Coyote Loco, Inc., a distributor of salsa, has the following historical collection pattern for its credit sales. 70 percent collected in the month of sale.15 percent collected in the first month after sale.10 percent collected in the second month after sale.4 percent collected in the third month after sale.1 percent uncollectible.
The sales on account have been budgeted for the last seven months as follows:
June $128,500
July 156,000
August 181,000
September 212,000
October 237,000
November 262,000
December 224,500
Problem 1: Compute the estimated total cash collections during October from credit sales.
Problem 2: Compute the estimated total cash collections during the fourth quarter from sales made on account during the fourth quarter.
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