Question

Schedule of Cash Collections on Accounts Receivable and Cash Budget

Bennett Inc. found that about 45% of its sales during the month were for cash. Bennett has the following accounts receivable payment experience:

Percent paid in the month of sale	25
Percent paid in the month after the sale	68
Percent paid in the second month after the sale	5

Bennett's anticipated sales for the next few months are as follows:

April	$250,000
May	290,000
June	280,000
July	295,000
August	300,000

Required:

1. Calculate credit sales for May.
$

Calculate credit sales for June.
$

Calculate credit sales for July.
$

Calculate credit sales for August.
$

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1. Calculate credit sales for each month.

2. Prepare a schedule of cash receipts for July and August. Round your answers to the nearest whole dollar, if necessary. If an amount box does not require an entry, leave it blank or enter "0". Be sure to enter percentages as whole numbers.

Bennett Inc. Schedule of Cash Receipts For July and August
				July		August
Cash sales				$		$
Payments on account:
From May credit sales:
$ ×  %
From June credit sales:
$ ×  %
$ ×  %
From July credit sales:
$ ×  %
$ ×  %
From August credit sales:
$ ×  %
Cash receipts				$		$

Answer 1

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	Bennette Inc.
	Sales Budget
		May	June	July	August
	Cash Sales	$       1,30,500	$   1,26,000	$       1,32,750	$   1,35,000
	Credit Sales	$       1,59,500	$   1,54,000	$       1,62,250	$   1,65,000
	Total Sales	$       2,90,000	$   2,80,000	$       2,95,000	$   3,00,000
	Workings:	May	June	July	August
(i)	Sales	$       2,90,000	$   2,80,000	$       2,95,000	$   3,00,000
(i) X 45%	Cash Sales (45%)	$       1,30,500	$   1,26,000	$       1,32,750	$   1,35,000
(i) X 55%	Credit Sales (55%)	$       1,59,500	$   1,54,000	$       1,62,250	$   1,65,000
	Bennette Inc.
	Schedule of expected cash receipts
	For July and August
		July	August
	Cash Sales	$       1,32,750	$   1,35,000
	Payment on account
	From May credit sales	$             7,975	$                -
	$159500 X 5%
	From June credit sales	$       1,04,720	$         7,700
	$154000 X 68%
	$154000 X 5%
	From July credit sales
	$162250 X 25%	$           40,563	$   1,10,330
	$162250 X 68%
	From August credit sales
	$165000 X 25%	$                    -	$       41,250
	Cash receipts	$       2,86,008	$   2,94,280