Alpha Company makes all its sales on account.Accounts receivable payment experience is as follows:
Alpha provided information on sales as follows:

-How much of May's sales are expected to be uncollectible?

Question

Alpha Company makes all its sales on account.Accounts receivable payment experience is as follows:  
 Alpha provided information on sales as follows:

-How much of May's sales are expected to be uncollectible?

Quizplus · Accepted Answer

May's uncollectible sales = (Sales made in the month of May × 0.05)
May's uncollectible sales = $150,000 × 0.05 = $7,500
 
5% is obtained by the following:
100% - (Percent paid in the month of sale + Percent paid in the month after the sale + Percent paid in the second month after the sale) = 100% - (35% + 54% + 6%) = 5%

Alpha Company Makes All Its Sales on Account