Answer:
$705,400
Explanation:
Computation for the estimated cash collections on accounts receivable for the month of February.
January sales received in February:
Within discount period $102,900
[ (15%*$700,000) x 0.98]
After discount period $49,000
( 7%* $700,000)
February Sales received in February:
Within discount period $441,000
[(60% * $750,000) x 0.98]
After discount period $112,500
(15% of $750,000)
Estimated cash collections for February $705,400
($102,900+$49,000+$441,000+$112,500)
Therefore the estimated cash collections on accounts receivable for the month of February is $705,400
