Question

Wells Company reports the following sales forecast: September, \(55,000; October, \)66,000; and November, $80,000. All sales are on account. Collections of credit sales are received as follows: 25% in the month of sale, 60% in the first month after sale, and 10% in the second month after sale. 5% of all credit sales are written off as uncollectible. Prepare a schedule of cash receipts for November.

Short answer

The total cash receipt for the month of November is $59,600.

Step-by-step solution

Given then information as

The September, October, and November sales forecasts are $55,000, $66,000, and $80,000.

Receivables rate are 25%, 60% and 10%.

Preparation of the schedule

Wells Company
Schedule for cash receipts
For the month of November
Particulars	Amount
Collections of November sales	$20,000
Add: Collection of September receivables	$33,000
Add: Collection of October receivable	$6,600
Total cash receipt	$59,600