- 12 Marks
Question
The following information was extracted from the books of LAHA Limited:
| Product P (units) | Product Q (units) |
|---|---|
| November | 1,500 |
| December | 2,000 |
| January | 1,000 |
| February | 2,000 |
| March | 3,000 |
Product P is sold for ₦200 per unit, and Product Q for ₦300 per unit. All sales are on credit. 20% of total sales are received in the month of sale, 40% in the following month, and the remaining balance (excluding bad debts) is received at the end of the second month. Bad debts are 2% of total sales and are written off at the end of the second month following sale.
Required:
Calculate the cash receipts expected in January, February, and March. (12 Marks)
Answer
- Tags: Accounts Receivable, Bad Debts, Cash Flow, Cash Receipts, Credit Sales, Sales Revenue
- Level: Level 1
- Topic: Accounting for Cost Elements
- Series: NOV 2015
- Uploader: Dotse