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The following data are given for Erich From Stores:
September
October
November
December
Actual
Estimated
Cash sales
$ 7,000
$ 6,000
$ 8,000
Credit sales
50,000
48,000
62,000
80,000
Total sales
57,000
54,000
70,000
86,000
Past experience indicates that net collections normally occur in the following pattern:
-No collections are made in the month of sale.
-Eighty percent of the sales of any month are collected in the following month.
-Nineteen percent of sales are collected in the second following month.
-One percent of sales are uncollectible.
1. Calculate the total cash receipts for November and December.
2. Compute the accounts receivable balance at November 30 if the October 31 balance is $50,000.
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