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Historically, Ragman Company has had no significant
40 percent of credit sales in the month of the sale
35 percent of credit sales in the first subsequent month
20 percent of credit sales in the second subsequent month
5 percent of credit sales in the third subsequent month
The
| January | $185,000 |
| February | 185,000 |
| March | 193,000 |
| April | 196,000 |
| May | 210,000 |
Required:
1. What is the forecasted
2. Due to deteriorating economic conditions, Ragman Company has now decided that its cash forecast should include a bad debt adjustment of 2 percent of credit sales, beginning with sales for the month of April. Because of this policy change, what will happen to the total expected cash inflow related to sales made in April? (CMA adapted)
Cash will __________ by $__________.
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