Question

In: Accounting

ABC Company has the following sales budget for the last six months of 2020:

 

Note: Not all sales are always collected. Remember Bad Debt Expense. So don’t worry if the problems do not add up to 100%.  

1. ABC Company has the following sales budget for the last six months of 2020:

                  July                             $9,000                       

                  August                      $8,000                       

                  September                 $11,000

                  October                      $9,000                       

Historically, the cash collection of sales has been as follows:

                                    35% of sales collected in the month of sale,

                                    45% of sales collected in the month following the sale,

                                    20% of sales collected in the second month following the sale.

What are expected cash collections for September? For October?

  1. Jason D’s sales for the next five months are as follows:

February                   $175,000

March                        $160,000

April                           $145,000

May                            $135,000

June                            $130,000

Collection history for the company indicates that 50% of sales are collected in the month of the sale, 38% is collected in the following month, and 12% of sales are uncollectible.

How much are total budgeted cash receipts for April? For May? For June?

  1. XYZ’s budgeted sales for the next three months are as follows:

February $130,000

March                        $170,000

April                           $200,000

Collection history for the company indicates that 60% of sales are collected in the month of the sale, 36% is collected in the following month, and 4% of sales are uncollectible. How much are budgeted cash receipts for April?

Solutions

Expert Solution

Given,

1. ABC Company has the following sales budget for the last six months of 2020:

                  July                           $9,000                       

                  August                      $8,000                       

                  September                $11,000

                  October                     $9,000                       

Historically, the cash collection of sales has been as follows:

                                    35% of sales collected in the month of sale,

                                    45% of sales collected in the month following the sale,

                                    20% of sales collected in the second month following the sale.

Expected cash collected for,

September    =$9250

October          =$9700

Given,

1. Jason D’s sales for the next five months are as follows:

February                   $175,000

March                        $160,000

April                           $145,000

May                            $135,000

June                            $130,000

Collection history for the company indicates that 50% of sales are collected in the month of the sale, 38% is collected in the following month, and 12% of sales are uncollectible.

Total budgeted cash receipts of

April    =$133300

May     =$122600

June   =$116300

Given,

1. XYZ’s budgeted sales for the next three months are as follows:

February                      $130,000

March                        $170,000

April                           $200,000

Collection history for the company indicates that 60% of sales are collected in the month of the sale, 36% is collected in the following month, and 4% of sales are uncollectible.

Budgeted cash receipts of April =$181200

ekkarill92 answered 1 year ago
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