Forward Company makes all its sales on account. Forward's accounts receivable payment experience is as follows:

Percent paid in the month of sale 30%

Percent paid in the month after the sale 65%

Percent paid in the second month after the sale 3%

Forward provided information on sales as follows:

September $120,000

October $140,000

November $220,000

December (expected) $260,000

1. What are the expected cash receipts in the month of November?

The expected cash receipts in the month of November are $160,600

Explanation:

Expected cash receipts in the month of November = 30% sales in the month of November + 65% sales in the month of October + 3% sales in the month of September.

Forward Company had sales in September of $120,000, in October of $140,000, in November of $220,000

Expected cash receipts in the month of November = 30% x $220,000 + 65% x $140,000 + 3% x $120,000 = $66,000 + $91,000 + $3,600 = $160,600