Reference no: EM132675967

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

January: $611,000

February: 963, 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 sale:

Within discount period - 60%

After discount period - 15

Collections within the month following sale:

Within discount period: 15

After discount period: 7

Returns, allowances, and uncollectible: 3

Total: 100%

Problem 1: Compute the estimated cash collections on accounts receivable for the month of Febuary.