Question

Judge Company's budgeted sales for the next five months are
given below (assume all sales are made on account):

             Budgeted Sales
January         $155,000                        
February        $272,000
March           $???????
April           $180,000
May             $235,000

Judge Company's sales are collected in the pattern:

22% collected in the month of sale
35% collected in the month following sale
27% collected in the second month following sale
16% collected in the third month following sale

Judge Company's budgeted accounts receivable at April 30 was
$330,980.

Calculate Judge Company's budgeted cash collections for May.

Answer 1

First of all we have to find out the Budgeted Sales for March.
For which we have to break up the Accounts Receivable as at April 30 of $330,980
The Sales of January of $155,000 has been fully received
	February	March	April	Balance
Total Accounts Receivable balance as at April 30				$                   3,30,980
Less:February Sales received in February, March an April	$                        59,840	$              95,200	$                 73,440	$                      43,520
Less:April Sales received in April			$                 39,600	$                   1,40,400
Balance Accounts Reecievable from March Sales				$                   1,47,060
So now for the March Sales the remaining % of sales to be collected are 43%(27%+16%)
So the Sales for March will be: $147,060 / 43% =$342,000
Statement Showing Cash Collection
Cash Collection from february Sales($272,000*16%)	$                        43,520
Cash Collection from March Sales($342,000*27%)	$                        92,340
Cash Collection from April Sales($180,000*35%)	$                        63,000
Cash Collection from May Sales($235,000*22%)	$                        51,700
Total Collection in the month of May	$                     2,50,560