The Guitar Shoppe reports the following sales forecast: August, $110,000; September, $190,000. Total sales includes 30% cash sales, 55% credit sales collected in the month following sale, and 15% credit sales written off as uncollectible. Prepare a schedule of cash receipts for September.

The correct answer is $117,500

Explanation:

According to the scenario, the given data are as follows:

Sales for august = $110,000

Sales for September = $190,000

So, we can calculate the September cash receipts by using following formula:

Cash receipt from August = $110,000 × 55% = $60,500

Cash receipt from September = $190,000 × 30% = $57,000

Total cash receipt for September = Cash receipt from August + Cash receipt from September

= $60,500 + $57,000

= $117,500

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