Question

Shadee Corp. expects to sell 560 sun visors in May and 320 in June. Each visor sells for $18. Shadee’s beginning and ending finished goods inventories for May are 70 and 45 units, respectively. Ending finished goods inventory for June will be 70 units.

It expects the following unit sales for the third quarter:

July	545
August	490
September	440

Sixty percent of Shadee’s sales are cash. Of the credit sales, 50 percent is collected in the month of the sale, 40 percent is collected during the following month, and 10 percent is never collected.

Required:

Calculate Shadee’s total cash receipts for August and September. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)

Answer 1

	Shadee Corp.
Sales Budget
Months	May	June	July	August	September
Budgeted unit sales	560	320	545	490	440
Selling Price Per unit	$                             18.00	$                 18.00	$                18.00	$                18.00	$               18.00
Total sales	$                     10,080.00	$           5,760.00	$          9,810.00	$          8,820.00	$         7,920.00
	May	June	July	August	September
Cash Sales(60%)	6,048.00	3,456.00	5,886.00	5,292.00	4,752.00
Credit Sales(40%)	4,032.00	2,304.00	3,924.00	3,528.00	3,168.00
	% of Cash collection of credit sales
May Credit Sales	50%	40%
June Credit Sales		50%	40%
July Credit Sales			50%	40%
August Credit Sales				50%	40%
Septmber Credit Sales					50%
Shadee's Total Cash Receipts for August and September
	August	September
Cash Sales	5,292	4,752
July Credit Sales(40%) in August	1,570
August Credit Sales(50%) in August and (40%) in September	1,764	1,411
September Credit Sales(50%) in September		1,584
Total Cash Collection	8,626	7,747