Answer:
Explanation:
To find the forecasted amount of total cash collections in November of Year 1, we first need to determine the credit sales for September, October, November, and December of Year 1, and January of Year 2.
Credit sales for September and October of Year 1 have already been given as 100,000 and 150,000, respectively.
For November, credit sales are 60% of 400,000 = 240,000.
For December, credit sales are 60% of 600,000 = 360,000.
For January of Year 2, credit sales are 60% of 200,000 = 120,000.
Now, we need to calculate the amount of credit sales that will be collected in November of Year 1.
5% of credit sales for November will be collected in November itself, which is 5% of 240,000 = 12,000.
25% of credit sales for November will be collected in December, which is 25% of 240,000 = 60,000.
65% of credit sales for November will be collected in January of Year 2, which is 65% of 240,000 = 156,000.
The remaining 5% of credit sales for November, which is 5% of 240,000 = 12,000, will never be collected.
Therefore, the total cash collections in November of Year 1 will be the sum of cash sales for November, and the amount of credit sales collected in November:
Cash sales for November = 40% of 400,000 = 160,000
Credit sales collected in November = 12,000
Total cash collections in November of Year 1 = 160,000 + 12,000 = 172,000.
Hence, the forecasted amount of total cash collections in November of Year 1 is $172,000.