Joyner Company has the following historical collection pattern for its credit sales: 70% collected in month of sale15% collected in the first month after sale10% collected in the second month after sale4% collected in the third month after sale1% uncollectibleBudgeted credit sales for the last six months of the year follow.July$30,000August35,000September40,000October45,000November50,000December42,500Required: A. Calculate the estimated total cash collections during October.B. Calculate the estimated total cash collections during the year's fourth quarter.
What will be an ideal response?
A.
| Month of Sale | October collections |
| July | $30,000 × 4% = $1,200 |
| August | $35,000 × 10% = 3,500 |
| September | $40,000 × 15% = 6,000 |
| October | $45,000 × 70% = 31,500 |
| ? | Total $42,200 |
B.
| Month of Sale | Credit sales | Amount Collected October | Amount Collected November | Amount Collected December |
| July | $30,000 | $1,200 | ? | ? |
| August | 35,000 | 3,500 | $1,400 | ? |
| September | 40,000 | 6,000 | 4,000 | $1,600 |
| October | 45,000 | 31,500 | 6,750 | 4,500 |
| November | 50,000 | ? | 35,000 | 7,500 |
| December | 42,500 | ? | ? | 29,750 |
| Total | $242,500 | $42,200 | $47,150 | $43,350 |
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