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In: Accounting

Exercise D5-21 In the coming year, Urayse, Inc. will be introducing its first product, a wrist...

Exercise D5-21

In the coming year, Urayse, Inc. will be introducing its first product, a wrist brace that protects serious video gamers from repetitive-motion injuries. The brace will be sold for $11.25 to retailers throughout the country. All sales will be made on account. An expected 65% of sales will be collected within the quarter of the sale, and another 30 % in the quarter following the sale. The remaining 5% of credit sales are expected to be uncollectible. The sales budget for the coming year is as follows:

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Budgeted sales units 25,000 40,000 50,000 80,000


Prepare Urayse, Inc.'s, cash receipts budget for the coming year. (Enter answers in necessary fields only. Leave other fields blank. Do not enter 0.)

Determine the Net Accounts Receivable at the end of the year. Assume that no accounts have been written off during the year.

Solutions

Expert Solution

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year
Cash received from 1st qaurter sales 25,000*$11.25*65% = $182,812.50 25,000*$11.25*30% = $84,375 $      267,187.50
Cash received from 2nd qaurter sales 40,000*$11.25*65% = $292,500 40,000*$11.25*30% = $135,000 $      427,500.00
Cash received from 3rd qaurter sales 50,000*$11.25*65% = $365,625 50,000*$11.25*30% = $168,750 $      534,375.00
Cash received from 4th qaurter sales 80,000*$11.25*65% = $585,000 $      585,000.00
Total Cash received $                                               182,812.50 $                                        376,875.00 $                                        500,625.00 $                                          753,750.00 $ 1,814,062.50
Net account receivable at the end of the year ($80,000*11.25%*30%) $ 270,000

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ekkarill92 answered 1 year ago
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