Question

The Overland Company is preparing its cash budget for the month of June. The following information is available concerning its accounts receivable: Estimated credit sales for June$332,000 Actual credit sales for May 257,000 Estimated collections in June for credit sales in June 25% Estimated collections in June for credit sales in May 65% Estimated collections in June for credit sales prior to May$50,000 Estimated write-offs in June for uncollectible credit sales 44,000 Estimated provision for bad debts in June for credit sales in June 42,000 What are the estimated cash receipts from accounts receivable collections in June

Answer 1

Answer:

total estimated cash collections = $300,050

Explanation:

estimated collections during June:

collections of credit sales from May = $257,000 x 65% = $167,050

collections from credit sales before May = $50,000

collections from credit sales during June = $332,000 x 25% = $83,000

total estimated cash collections = $300,050

the write offs and the bad debt provisions are not included in this calculation.