Question

ABC Company has budgeted sales for the next six months as follows:

             Budgeted Sales in Units
March             19,000 units                          
April             23,000 units
May               34,000 units
June              17,000 units
July              48,000 units
August            69,000 units

ABC Company sells its inventory to customers for $16 per unit.
30% of the company's sales are cash sales and the other 70% of
sales are made on account. The sales on account are collected
in the pattern:

35% collected in the month of sale
26% collected in the month following sale
19% collected in the second month following sale
12% collected in the third month following sale
8% collected four months after the month of sale

Calculate ABC Company's budgeted cash collections for July.

Answer 1

Answer = $ 588,352

Note:

	March	April	May	June	July
Sales	3,04,000	3,68,000	5,44,000	2,72,000	7,68,000
Cash Sales ( 30%)	91,200	1,10,400	1,63,200	81,600	2,30,400
Credit Sales (70%)	2,12,800	2,57,600	3,80,800	1,90,400	5,37,600
Receipts of Credit Sales:	March	April	May	June	July
1.35% collected in the month of sale	74,480.00	90,160.00	1,33,280.00	66,640.00	1,88,160.00
2. 26% in the month following the sale		55,328.00	66,976.00	99,008.00	49,504.00
3. 19% collected in the second month following sale			40,432.00	48,944.00	72,352.00
4. 12% collected in the third month following sale				25,536.00	30,912.00
5. 8% collected four months after the month of sale					17,024.00
Cash Sales receipts	91,200.00	1,10,400.00	1,63,200.00	81,600.00	2,30,400.00
Total cash Collections	1,65,680.00	2,55,888.00	4,03,888.00	3,21,728.00	5,88,352.00