Question
In: Finance
Mercy Sports Shop started operations on 1st January, 2020. The firm sells sports shoes in shopping...
- Mercy Sports Shop started operations on 1st January, 2020. The firm sells sports shoes in shopping malls. The company expects a 20 per cent increase in sales per month for November and December 2020. Mercy has budgeted sales as indicated in the following table:
|
Sales |
October |
November |
December |
Total |
|
Cash sales |
Ksh 300,000/= |
|||
|
Sales on account |
Ksh 900,000/= |
|||
|
Total budget sales |
Ksh 1,200,000/= |
Required:-
- Using excel complete the sales budget by filling in the missing amounts.
- Determine the amount of sales revenue that will appear on the pro-forma income statement for the company’s fourth quarter 2020.
Solutions
Expert Solution
i )
| Sales | October | November | December | Total |
| Cash sales | 300000 | 360000 | 432000 | 1092000 |
| Sales on account | 900000 | 1080000 | 1296000 | 3276000 |
| Total budget sales | 1200000 | 1440000 | 1728000 | 4368000 |
ii) The amount of sales revenue that will appear on the pro-forma income statement for the company’s fourth quarter 2020. is the sum if total budget sales for October, Nov and Dec = $ 4368,000
Workings
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