Answer (D) is correct . The estimated cash receipts from accounts receivable collections in March are equal to the estimated amount to be collected on credit sales in March plus ? the estimated amount to be collected in March on credit sales in previous months. Estimated credit receipts in March for March ($300,000 ¡Á 30%) $??90,000 Estimated credit receipts in March for February ($250,000 ¡Á 60%) 150,000 Estimated collections for credit sales prior to February 15,000 Estimated cash to be collected in March $255,000 The estimated write-offs in March for uncollectible credit sales and the estimated provision for bad debts in March for credit sales in March are not used in the calculation because the percentages of estimated collections are assumed to be based on the gross credit sales amounts.Answer (A) is incorrect because Deducting write-offs and provision for bad debts results in $240,000; however, these are not used in the calculation because the percentages of estimated collections are assumed to be based on the gross credit sales amounts.
Answer (B) is incorrect because Subtracting the provision for bad debts of $8,000 results in $247,000; however, bad debts are not used in the calculation because the percentages of estimated collections are assumed to be based on the gross credit sales amounts.
Answer (C) is incorrect because Subtracting the write-offs of $7,000 results in $248,000; however, write-offs are not used in the calculation because the percentages of estimated collections are assumed to be based on the gross credit sales amounts.
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Determine the estimated cash receipts from accounts receivable collections in March.