Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business September, October, and November are $237,000, $308,000, and $422,000, respectively. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale.The cash collections expected in October from accounts receivable are estimated to bea.$172,480b.$205,660c.$246,792d.$139,300

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Asked Dec 16, 2019
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Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business September, October, and November are $237,000, $308,000, and $422,000, respectively. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale.

The cash collections expected in October from accounts receivable are estimated to be

a.$172,480
b.$205,660
c.$246,792
d.$139,300
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Expert Answer

Step 1

Cash collections refer to the amount of cash collected from the customers on sales and from the debtors on receivables, during a specific period.

Step 2

Cash collections expected in Octobe...

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Particulars Amount 80% of October sale on account collected in October (308,000x70%x809 20% of September sale on account collected in October (237,000x70%x $172,480 $3,180 $205,660 Cash collections expected in October from accounts receivable

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