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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.
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