Question

Cave Hardware's forecasted sales for April; May; June; and July are $200,000; $230,000; $190,000; and $240,000; respectively. Sales are 65% cash and 35% credit with all accounts receivables collected in the month following the sale. Cost of goods sold is 75%of sales and ending inventory is maintained at $60,000 plus 10% of the following month's cost of goods sold. All inventory purchases are paid 22% in the month of purchase and 78%in the following month. What are the cash collections budgeted for June?

Answer 1

Answer--------------$204,000

Working

Cash collection budget
For June
Cash from Cash sales in June	$        123,500.00
Cash from credit sales of May	$           80,500.00
Total cash collected	$        204,000.00

.

	April	May	June	July
Sales	$        200,000.00	$        230,000.00	$        190,000.00	$        240,000.00
Cash sales	$        130,000.00	$        149,500.00	$        123,500.00	$        156,000.00
Credit sales	$           70,000.00	$           80,500.00	$           66,500.00	$           84,000.00
Collection in next month of sale	$           70,000.00	$           80,500.00	$           66,500.00	$           84,000.00