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Forward Company makes all its sales on account. Forward's accounts receivable payment experience is as follows:
Percent paid in the month of sale 30%
Percent paid in the month after the sale 65%
Percent paid in the second month after the sale 3%
Forward provided information on sales as follows:
September $120,000
October $140,000
November $220,000
December (expected) $260,000
1. What are the expected cash receipts in the month of November?

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phamdiep1810

Answer:

The expected cash receipts in the month of November are $160,600

Explanation:

Expected cash receipts in the month of November = 30% sales in the month of November + 65% sales in the month of October + 3% sales in the month of September.

Forward Company had sales in September of $120,000, in October of $140,000 , in November of $220,000

Expected cash receipts in the month of November = 30% x $220,000 + 65% x  $140,000 + 3% x $120,000 = $66,000 + $91,000 + $3,600 = $160,600

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