Computing the amount of cash collections


Response to the following problem:

Tolla Company is estimating the following sales for the first six months of next year: January $350,000, February $300,000, March $320,000, April $410,000, May $450,000 ,June $470,000 ,Sales at Tolla are normally collected as 70 percent in the month of sale, 25 percent in the month following the sale, and the remaining 5 percent being uncollectible. Also, customers paying in the month of sale are given a 2 percent discount.

Based on this information, how much cash should Tolla expect to collect during the month of April?

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Financial Accounting: Computing the amount of cash collections
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