Schedule of Cash Collections of Accounts ReceivableOfficeMart Inc. has "cash and carry" customers and creditcustomers. Office Mart estimates that 25% of monthly salesare to cash customers, while the remaining sales are tocredit customers. Of the credit customers, 25% pay theiraccounts in the month of sale, while the remaining 75%pay their accounts in the month following the month ofsale. Projected sales for the next three months are asfollows:OctoberNovemberDecember$110,000138,000201,000The Accounts Receivable balance on September 30 was$74,000.Prepare a schedule of cash collections from sales forOctober, November, and December. Round all calculationsto the nearest whole dollar.OfficeMart Inc.Schedule of Cash Collections from SalesFor the Three Months Ending December31October November DecemberReceipts from cash sales:Cash salesSeptember sales on account:Collected in OctoberOctober sales on account:Collected in OctoberCollected in NovemberNovember sales on account:Collected in NovemberCollected in DecemberDecember sales on account:Collected in DecemberTotal cash receipts

Schedule of cash collections shows the cash receipts and cash inflows from different customers.…

chedule of Cash Collections from Sales or the Three Months Ending December 31 October November December eceipts from cash sales: Cash sales eptember sales on account: Collected in October ctober sales on account:

chedule of Cash Collections from Sales or the Three Months Ending December 31 October November December eceipts from cash sales: Cash sales eptember sales on account: Collected in October ctober sales on account:

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 18E

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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

Schedule of Cash Collections of Accounts Receivable
OfficeMart Inc. has "cash and carry" customers and credit
customers. Office Mart estimates that 25% of monthly sales
are to cash customers, while the remaining sales are to
credit customers. Of the credit customers, 25% pay their
accounts in the month of sale, while the remaining 75%
pay their accounts in the month following the month of
sale. Projected sales for the next three months are as
follows:
October
November
December
$110,000
138,000
201,000
The Accounts Receivable balance on September 30 was
$74,000.
Prepare a schedule of cash collections from sales for
October, November, and December. Round all calculations
to the nearest whole dollar.
OfficeMart Inc.
Schedule of Cash Collections from Sales
For the Three Months Ending December
31
October November December
Receipts from cash sales:
Cash sales
September sales on account:
Collected in October
October sales on account:
Collected in October
Collected in November
November sales on account:
Collected in November
Collected in December
December sales on account:
Collected in December
Total cash receipts

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