Slowinski Company has the following sales budget:
$\begin{array}{lll}\text { Month }&\text { Cash Sales }&\text { Credit Sales }\
\text { September } & \$ 100,000 & \$ 300,000 \
\text { October } & 125,000 & 180,000 \
\text { November } & 130,000 & 210,000 \
\text { December } & 135,000 & 190,000
\end{array}$
Collections of credit sales are 50% in the month of sale,40% in the month following sale,and 10% two months following sale.No uncollectible accounts are expected.What are the estimated cash collections in November?
A) $130,000
B) $197,000
C) $327,000
D) $337,000

Question

Quizplus · Accepted Answer

To calculate the estimated cash collections in November, we consider cash sales in November and collections from credit sales in September, October, and November. Cash sales in November are $130,000. Collections from credit sales are calculated as follows: 50% of November's credit sales ($210,000 * 50% = $105,000), 40% of October's credit sales ($180,000 * 40% = $72,000), and 10% of September's credit sales ($300,000 * 10% = $30,000). Adding these amounts gives us $130,000 + $105,000 + $72,000 + $30,000 = $337,000.

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