Spencer Company has budgeted sales for the upcoming months as follows: Seventy percent of the sales are credit sales, the remainder are made in cash. Credit sales are collected 40% in the month of sale, 50% in the month following the sale, and 10% in the second month following the sale.
a. Compute Spencer's cash receipts for April.
b. Compute Spencer's cash receipts for May.
c. Compute the accounts receivable balance for May 31.

Question

Spencer Company has budgeted sales for the upcoming months as follows:  Seventy percent of the sales are credit sales, the remainder are made in cash. Credit sales are collected 40% in the month of sale, 50% in the month following the sale, and 10% in the second month following the sale.
a. Compute Spencer's cash receipts for April.
b. Compute Spencer's cash receipts for May.
c. Compute the accounts receivable balance for May 31.

Quizplus · Accepted Answer

The Answer of Spencer Company has budgeted sales for the upcoming months as follows:  Seventy percent of the sales are credit sales, the remainder are made in cash. Credit sales are collected 40% in the month of sale, 50% in the month following the sale, and 10% in the second month following the sale.
a. Compute Spencer's cash receipts for April.
b. Compute Spencer's cash receipts for May.
c. Compute the accounts receivable balance for May 31.

Spencer Company Has Budgeted Sales for the Upcoming Months as Follows