Doitall Company makes all its sales on account. Doitall's accounts receivable payment experience is as follows:
Doitall provided information on sales as follows:
$\begin{array}{lr}
\text { Percent paid in the month of sale } & 18 \% \
\text { Percent paid in the month after the sale } & 77 \% \
\text { Percent paid in the second month after the sale } & 3 \%
\end{array}$ $$\begin{array} { l l }
\text { September } & \$ 120,000 \
\text { October } & \$ 150,000 \
\text { November } & \$ 220,000 \
\text { December (expected) } & \$ 250,000
\end{array}$$
-Refer to the Figure.What are the expected cash receipts for December?

Question

Doitall Company makes all its sales on account. Doitall's accounts receivable payment experience is as follows:
Doitall provided information on sales as follows:
 $\begin{array}{lr}
\text { Percent paid in the month of sale } & 18 \% \
\text { Percent paid in the month after the sale } & 77 \% \
\text { Percent paid in the second month after the sale } & 3 \%
\end{array}$ $$\begin{array} { l l } 
\text { September } & \$ 120,000 \
\text { October } & \$ 150,000 \
\text { November } & \$ 220,000 \
\text { December (expected) } & \$ 250,000
\end{array}$$
-Refer to the Figure.What are the expected cash receipts for December?

Quizplus · Accepted Answer

For December, the expected cash receipts are calculated based on the sales made in October, November, and the expected sales in December, considering the percentages of payments made in the month of sale, the month after the sale, and the second month after the sale. - From December sales (18% of $250,000): $250,000 * 18% = $45,000- From November sales (77% of $220,000): $220,000 * 77% = $169,400- From October sales (3% of $150,000): $150,000 * 3% = $4,500Adding these amounts gives the total expected cash receipts for December: $45,000 + $169,400 + $4,500 = $218,900.

Doitall Company Makes All Its Sales on Account -Refer to the Figure