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Schedule of Cash Collections on Accounts Receivable and Cash Budget Roybal Inc. sells all of its...

Schedule of Cash Collections on Accounts Receivable and Cash Budget

Roybal Inc. sells all of its product on account. Roybal has the following accounts receivable payment experience:

Percent paid in the month of sale 20
Percent paid in the month after the sale 55
Percent paid in the second month after the sale 23

To encourage payment in the month of sale, Roybal gives a 2% cash discount. Roybal's anticipated sales for the next few months are as follows:

April $237,500
May 310,000
June 325,000
July 300,000
August 375,000

Required:

1. Prepare a schedule of cash receipts for July. Be sure to enter percentages as whole numbers.

Roybal Inc.
Schedule of Cash Receipts
For July
Payments on account:
From May credit sales:
$ × % $
From June credit sales:
$ × %
From July credit sales:
$ × %
Less: July cash discount
$ × %
Cash receipts $

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Partially correct

2. Prepare a schedule of cash receipts for August. Be sure to enter percentages as whole numbers.

Roybal Inc.
Schedule of Cash Receipts
For August
Payments on account:
From June credit sales:
$ × % $
From July credit sales:
$ × %
From August credit sales:
$ × %
Less: August cash discount
$ × %
Cash receipts $

Solutions

Expert Solution

1.

Roybal Inc.
Schedule of Cash Receipts For July
Payments on account:  
From May credit sales:  
310,000 x 23%      71,300.00
From June credit sales:  
325,000 x 55%    178,750.00
From July credit sales:  
300,000 x 20%      60,000.00
Less: July cash discount  
(60,000 x 2%) -      1,200.00
Cash receipts      308,850.00

2.

Roybal Inc.
Schedule of Cash Receipts For August
Payments on account:  
From June credit sales:  
325,000 x 23%      74,750.00
From July credit sales:  
300,000 x 55%    165,000.00
From August credit sales:  
375,000 x 20%      75,000.00
Less: August cash discount  
(75,000 x 2%) -      1,500.00
Cash receipts      313,250.00

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