Fox Trail Center’s sales are all made on account. The firm’s collection experience has been that...

Fox Trail Center’s sales are all made on account. The firm’s collection experience has been that 32% of a month’s sales are collected in the month the sale is made, 51% are collected in the month following the sale, and 15% are collected in the second month following the sale. The sales forecast for the months of May through August is as follows:


May	$	231,000
June		283,000
July		311,000
August		356,000

Required:Calculate the cash collections that would be included in the cash budgets for July and August.

Expert Solution

Calculations	Particulars	May	June	July	August
A	Sales	231,000	283,000	311,000	356,000
B = A x 32%	Collection in month of sales (First month)	73,920	90,560	99,520	113,920
C = A of previous month x 51%	Collection in second month		117,810	144,330	158,610
D = A two months back x 15%	Collection in third month			34,650	42,450
E = B+C+D for July and August	Collection for July and August			278,500	314,980

ekkarill92 answered 2 years ago

1. Plantsville makes all sales on account, subject to the following collection pattern: 30% are collected...

1. Plantsville makes all sales on account, subject to the following collection pattern: 30% are collected in the month of sale; 60% are collected in the first month after sale; and 10% are collected in the second month after sale. If sales for October, November, and December were $79,000, $69,000, and $59,000, respectively, what was the budgeted receivables balance on December 31? Multiple Choice $67,000. $41,300. $48,200. $49,300. None of the answers is correct. 2. Glastonbury Inc. began operations in...

Budgeting Vern's makes all sales on account, subject to the following collection pattern: 20% are collected...

Budgeting Vern's makes all sales on account, subject to the following collection pattern: 20% are collected in the month of sale; 70% are collected in the first month after sale; and 10% are collected in the second month after sale. Required: If sales for October, November and December were $171,662, $198,213, and $145,268, respectively, what was the budgeted receivables balance on December 31?

The Dubious Company operates in an industry where all sales are made on account. The company...

The Dubious Company operates in an industry where all sales are made on account. The company has experienced bad debt losses of 1.40% of credit sales in prior periods. Presented below is the company's forecast of sales and expenses over the next three years. Year 1 Year 2 Year 3 Sales Revenue $ 373,000 $ 379,000 $ 378,000 Bad Debt Expense Unknown Unknown Unknown Other Expenses 337,000 337,000 337,750 Net Income Unknown Unknown Unknown Required: Calculate Bad Debt Expense and...

A- All of Winner Corporation's sales are on account. 35% of the sales on account are...

A- All of Winner Corporation's sales are on account. 35% of the sales on account are collected in the month of sale, 45% in the month following sale, and the remainder (20%) are collected in the second month following sale. The following are budgeted sales data for the company: Total sales January $50,000 February $60,000 March $40,000 April $30,000 What is the amount of cash that should be collected in April? Show your calculations 2- Alfa Corporation manufactures and sells...

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

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 sale 65% Percent paid in the second month after sale 3% Forward provided information on sales as follows: September $120,000 October $140,000 November $220,000 December (expected) $260,000 ? What are the expected cash receipts in December? a. $210,400 b. $250,000 c. $225,200 d. $50,000 e. $179,000

Right now, all of the "stuff" that has been created in the world is made of...

Right now, all of the "stuff" that has been created in the world is made of protons, electrons, and neutrons. I'm aware that particles other than these have much shorter lifetimes. But I've also heard that mixing particles in the same state can increase their lifetimes - the neutron, for example, has a half life of 15 minutes when it's alone, but is stable in an atom. Could we make combinations of other particles that last for (at least) days...

It has been suggested that not all accounting choices are made by management in the best...

It has been suggested that not all accounting choices are made by management in the best interest of fair and consistent financial reporting. What are motivations can you think of for management's choice of accounting methods?

Katrupi, Inc., has five departments that handle all sales, billing, and collection processes. The five departments...

Katrupi, Inc., has five departments that handle all sales, billing, and collection processes. The five departments are sales, billing, accounts receivable, warehouse, and general ledger. These processes occur as follows: a. A customer mails a purchase order to Katrupi, and it is forwarded to the sales department. b. A sales clerk in the sales department prepares a four‐copy sales order. Two copies are forwarded to billing, one copy to the warehouse, and one copy to general ledger. The sales clerk...

QUESTION 4 The following misstatements are sometimes found in the sales and collection cycle’s account balances...

QUESTION 4 The following misstatements are sometimes found in the sales and collection cycle’s account balances a. Several account receivables in the accounts receivable subsidiary ledger are not included in the aged trial balance b. cash received from collections of accounts receivable in the subsequent period is recorded as current period receipts c. the allowance for doubtful debts is inadequate because of the client’s failure to reflect the current downturn in the economy when determining the doubtful debts allowanced d....

8. The percentage of sales method has been used to forecast the firm’s financial statements. Sup-pose...

8. The percentage of sales method has been used to forecast the firm’s financial statements. Sup-pose one of the senior executives asked you what assumptions are implied when one uses the percentage of sales method. That is, under what circumstances would the percentage of sales method produce a valid, as opposed to an incorrect, forecast? How would you answer? 9. 9.What are some other methods that could be used to forecast the asset-and-liability balances and, thus, the forecasted financial requirements?...

Question