This is in relation to Monthly Cash Receipts Schedule:?

Question

Monthly Cash Receipts

Sales 190K, Credit Sales (70%) 133K, Cash Sales 57K,Collections 40% (1 month): 53,200, Collections 60k (2 months) 79,800 - How did someone compute a total cash receipt figure of $146,600? using the above figures? I have tried EVERY combination and no luck. HELP - unless my friend's answer is wrong...she figured it but wants be to figure out the computation myself.

Answer 1

It's impossible.  Here's why.  In Accounting, you have total receipts, then { I'll put it this way:  it is supposed to} it's broken down in to cash revenues, purchases on

credit, honored coupons, credits, discounts for purchased supplies, etc.

Further, the two month collections has to be prorated since we have Monthly cash receipts.

Total Revenue:   190,000

Cash Revenue:     57000

Cash collections 1 53200

Cash collections 2 39900

DR to tax 4503     credit to locality   4503

145597.   So they broke down the collections in to two categories and assumed they were paid in cash [dubious].

Then they subtracted some sort of tax of 3%.  They made a math error as it comes to 145597, not 146,600.   I put credit to locality as the tax would be too low for any state that has sales tax.  The three percent would not be for A/R allowance.  That would be a different category.

Answer 2

Sounds like "someone" is in error.  30% collection in month of sale, and 40% and 60% (=100%) collection of the 70% balance uncollected in the month of sale equals 100% (30% + 70%) collection of the month's sales, $190K.