Question

Beca Retailers expects credit sales in the next quarter as follows:

April		$79,100
May		84,800
June		101,000

Prior experience has shown that 64 percent of a month’s sales are collected in the month of sale, 20 percent are collected in the month following sale, and the remaining 16 percent are collected in the second month following sale. February and March sales were $82,200 and $110,000, respectively.

Estimate budgeted cash receipts for April, May, and June.

Collection of credit sales	April		May		June
Collection of February sales	$		$		$
Collection of March sales
Collection of April sales
Collection of May sales
Collection of June sales
	$		$		$

Answer 1

Estimate budgeted cash receipts for April, May, and June.

Collection of credit sales	April		May		June
Collection of February sales	$13,152 ($82,200*16%)
Collection of March sales	$22,000 ($110,000*20%)		$17,600 ($110,000*16%)
Collection of April sales	$50,624 ($79,100*64%)		$15,820 ($79,100*20%)		$12,656 ($79,100*16%)
Collection of May sales			$54,272 ($84,800*64%)		$16,960 ($84,800*20%)
Collection of June sales					$64,640 ($101,000*64%)
	$85,776		$87,692		$94,256