Pirate Video Company has made the following sales projections for the next six
months. All sales are credit sales.
March $24,000 June $28,000
April 30,000 July 35,000
May 18,000 August 38,000
Sales in January and February were $27,000 and $26,000, respectively. Experience has shown that of total sales, 10 percent are uncollectible, 30 percent are collected in the month of sale, 40 percent are collected in the following month, and 20 percent are collected two months after sale.
Prepare a monthly cash receipts schedule for the firm for March through
Of the sales expected to be made during the six months from March through
August, how much will still be uncollected at the end of August? How much of
this is expected to be collected later?
The expert prepares a monthly cash receipts schedules for the firm for March.