Reference no: EM133085939

Question - Sales on account for the first two months of the current year are budgeted as follows.

January $800,000

February 880,000

All sales are made on terms of 2/10, n/30 (2 percent discount if paid in 10 days, full amount by 30 days); collections on accounts receivable are typically made as follows.

Collections within the month of sale:

Within discount period 70%

After discount period 10

Collections within the month following sale:

Within discount period 12

After discount period 6

Returns, allowances, and uncollectibles 2

Total 100%

Required - Compute the estimated cash collections on accounts receivable for the month of February.