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    Collection of receivables and ending balance

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    For a company accounts receivables balances as a percentage of a March's sales are 95% of March's sales, 55% of February's sales, and 20% of January's.

    If this pattern continues, what is the estimated percentage of cash flows from April sales, March sales, February, and January scales that are expected to be collected in April?

    If January Sales were $100,000, February Sales $200,000; March Sales $300,000, and April Sales $400,000, what is the Accounts Receivables Balance in April (assuming the same AR accounts receivable pattern as given in March).

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    Solution Preview

    Based on the AR balances, the collection pattern is
    5% of sales in the month (95% of March is not collected)
    40% in the second month (total 45% collected and 55% of Feb is outstanding)
    35% ...

    Solution Summary

    The solution explains how to calculate the cash collection from receivables and the balance in the accounts receivable.