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LaChutCorporation has found that 80​% of its sales in any given month are credit​ sales, while...

LaChutCorporation has found that 80​% of its sales in any given month are credit​ sales, while the remainder are cash sales. Of the credit​ sales, LaChut Corporation has experienced the following collection​ pattern:

25% received in the month of the sale

50% received in the month after the sale

24% received two months after the sale

1% of the credit sales are never received

November sales for last year were $90,000​,

while December sales were $125,000.

Projected sales for the next three months are as​ follows:

January sales. . . . . . . . . . . . . . . . . . . . . . . . . . .

$155,000

February sales. . . . . . . . . . . . . . . . . . . . . . . .

$135,000

March sales. . . . . . . . . . . . . . . . . . . . . . . . . . .

$180,000

Requirement

Prepare a cash collections budget for the first​ quarter, January-March, with a column for each month and for the quarter. ​(Round your answers to the nearest whole​ dollar.)

LaChut Corporation

Cash Collections Budget

For the Months of January through March

January

Cash sales

Collections on credit sales:

25% Month of sale

50% Month after

24% Two months after

Total cash collections

Solutions

Expert Solution

Solution

LaChut Corporation
Cash Collections Budget
For the Months of January through March
January February March
Cash sales $        31,000.00 $    27,000.00 $                   36,000.00
Collections on credit sales:
25% Month of sale $        31,000.00 $    27,000.00 $                   36,000.00
50% Month after $        50,000.00 $    62,000.00 $                   54,000.00
24% Two months after $        17,280.00 $    24,000.00 $                   29,760.00
Total cash collections $      129,280.00 $ 140,000.00 $                 155,760.00

Working

.

November December January February March
Total sales $        90,000.00 $      125,000.00 $ 155,000.00 $                 135,000.00 $ 180,000.00
Cash sales $        18,000.00 $        25,000.00 $    31,000.00 $                   27,000.00 $     36,000.00
Credit sales $        72,000.00 $      100,000.00 $ 124,000.00 $                 108,000.00 $ 144,000.00

ekkarill92 answered 1 year ago
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