Question

Question: Meeks Company has the following sales for the first quarter of 2019:

January February March Cash sales \( 5,000 \) 5,500 \( 5,250 Sales on account 15,000 14,000 14,500 Total sales \) 20,000 \( 19,500 \) 19,750 Sales on account are collected the month after the sale. The Accounts Receivable balance on January 1 is $12,500, the amount of December’s sales on account. Calculate the cash receipts from customers for the first three months of 2019.

Short answer

Answer

The cash receipts from customers in January, February, and March is$17,500, $20,500, and $19,250, respectively.

Step-by-step solution

Meaning of Accounts Receivable

Accounts receivable refers to the amount that a business will receive from its customers against which already credit sales are made.

Statement showing the cash receipts from customers 

Particulars	January	February	March
Account receivable balance 1 January	$12,500
Cash sales	$5,000	$5,500	$5,250
Credit sales	-	$15,000	$14,000
Total cash receipts from customers	$17,500	$20,500	$19,250

Note:The amount of 2018 December’s sales will be received in January 2019.