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coyote loco, inc., a distributor of salsa, has the following historical collection pattern for its credit sales. 70 percent collected in the month of sale. 15 percent collected in the first month after sale. 10 percent collected in the second month after sale. 4 percent collected in the third month after sale. 1 percent uncollectible. the sales on account have been budgeted for the last seven months as follows: june $ 49,000 july 60,000 august 70,000 september 80,000 october 90,000 november 100,000 december 85,000 required: 1. compute the estimated total cash collections during october from credit sales. 2. compute the estimated total cash collections during the fourth quarter from sales made on account during the fourth quarter.

Respuesta :

The estimated total cash collections during October from credit sales is 218,360. The fourth quarter sales made on account during the fourth quarter is 595,000.

What are sales?

Sales can be defined as the part were some goods or commodities are being sold to a consumer or a buyer.

In October, 70% of sales are collected.

The total credit sales is = 70% of 233,000 = 163,100.

In October, 15% of September sales will be recovered. 15% of 208,000 equals 31,200

In October, 10% of August sales are recovered. 10% of 179,000 is 17,900

In October, 4% of July sales are recovered. 4% of 154,000 equals 6,160

Total

= 163,100 + 31,200 + 17,900 + 6,160

= $218,360

(b) 4th quarter will be the month of October, November, and December

September: 233,000 (70% collected in October, 15% in November, and 10% in December).

= 70%+15%+10%

= 95% will be gathered in the fourth quarter

95% of 233,000

= 221,350

November sales: 258,000 (70% in Nov, 15% in December).

Total = 85%.

85% of a total of 258,000

= 219,300

December sales: $220,500 (70% will be collected in December)

= 70% of 220,500 = 154,350

Total collected amount:

=  221,350 + 219,300 + 154,350 = 595,000

Learn more about sales, here:

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