Question
In: Accounting
Crew Clothing (CC) sells women’s resort casual clothing to high-end department stores and in its own...
Crew Clothing (CC) sells women’s resort casual clothing to
high-end department stores and in its own retail boutiques. CC
expects sales for January, February, and March to be $470,000,
$530,000, and $550,000, respectively. Twenty percent of CC’s sales
are cash, with the remainder collected evenly over two months.
During December, CC’s total sales were $780,000. CC is beginning
its budget process and has asked for your help in preparing the
cash budget.
Compute CC’s expected cash receipts from customers for each
month.
Solutions
Expert Solution
- All working forms part of the answer
- Working for cash sales and amount of credit sales to be collected.
50% of credit sale is collected in month of sale, 50% in following month.
|
December |
January |
February |
March |
|
|
Sales |
$ 7,80,000.00 |
$ 4,70,000.00 |
$ 5,30,000.00 |
$ 5,50,000.00 |
|
Cash sale 20% |
$ 1,56,000.00 |
$ 94,000.00 |
$ 1,06,000.00 |
$ 1,10,000.00 |
|
Credit Sale 80% |
$ 6,24,000.00 |
$ 3,76,000.00 |
$ 4,24,000.00 |
$ 4,40,000.00 |
|
50% of credit sale |
$ 3,12,000.00 |
$ 1,88,000.00 |
$ 2,12,000.00 |
$ 2,20,000.00 |
- Requirement : Total cash collected
|
January |
February |
March |
|
|
Cash Sale for the month |
$ 94,000.00 |
$ 1,06,000.00 |
$ 1,10,000.00 |
|
Add: Cash collected for credit sale happened in: |
|||
|
December |
$ 3,12,000.00 |
||
|
January |
$ 1,88,000.00 |
$ 1,88,000.00 |
|
|
February |
$ 2,12,000.00 |
$ 2,12,000.00 |
|
|
March |
$ 2,20,000.00 |
||
|
Total cash collected |
$ 5,94,000.00 |
$ 5,06,000.00 |
$ 5,42,000.00 |
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