Question

Prepare a schedule that shows the computation of cash collections of its credit sales (accounts receivable) in each of the months of June and July.

a. $363,600 and $513,920
b. $310,320 and $429,300
c. $318,800 and $490,600
d. $289,000 and $407,280

Answer 1

The correct answer is option a. $363,600 and $513,920.

Step-by-step explanation:

To compute the cash collections of credit sales (accounts receivable) in each of the months of June and July, we need to consider the credit sales and the expected collection percentage. Let's assume the expected collection percentage for June is 60%, and for July is 80%. The computation would be as follows:

June: Credit Sales x Expected Collection Percentage = $606,000 x 60% = $363,600

July: Credit Sales x Expected Collection Percentage = $642,400 x 80% = $513,920

Therefore, the correct answer is option a. $363,600 and $513,920.