The treasurer of Simmons Corporation, a newly formed software company is trying to ascertain Simmons cash flows for the next three months. Expected sales are:
$$\begin{array} { c r r r }
& \text { January } & \text { February } & \text { March } \
\text { Expected Sales } & \$ 200 & \$ 220 & \$ 300
\end{array}$$
50% of sales are made for cash. Simmons expects to receive 25% in the month following the sale and 20% in the second month following the sale. The remaining 5% are expected to be un-collectible. Gross margin is 20%, and purchases are made one month prior to sale. Purchases are paid one month after received.
-Recorded bad debt expense for March should be:

Question

The treasurer of Simmons Corporation, a newly formed software company is trying to ascertain Simmons cash flows for the next three months. Expected sales are:
$$\begin{array} { c r r r } 
& \text { January } & \text { February } & \text { March } \
\text { Expected Sales } & \$ 200 & \$ 220 & \$ 300
\end{array}$$
50% of sales are made for cash. Simmons expects to receive 25% in the month following the sale and 20% in the second month following the sale. The remaining 5% are expected to be un-collectible. Gross margin is 20%, and purchases are made one month prior to sale. Purchases are paid one month after received. 
-Recorded bad debt expense for March should be:

Quizplus · Accepted Answer

The Answer of The treasurer of Simmons Corporation, a newly formed software company is trying to ascertain Simmons cash flows for the next three months. Expected sales are:
$$\begin{array} { c r r r } 
& \text { January } & \text { February } & \text { March } \
\text { Expected Sales } & \$ 200 & \$ 220 & \$ 300
\end{array}$$
50% of sales are made for cash. Simmons expects to receive 25% in the month following the sale and 20% in the second month following the sale. The remaining 5% are expected to be un-collectible. Gross margin is 20%, and purchases are made one month prior to sale. Purchases are paid one month after received. 
-Recorded bad debt expense for March should be:

The Treasurer of Simmons Corporation, a Newly Formed Software Company