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.

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

ekkarill92 answered 1 year ago

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Crew Clothing (CC) sells women’s resort casual clothing to high-end department stores and in its own...

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