Question

1. Schedule of Cash Collections on Accounts Receivable and Cash Budget

   Bennett Inc. found that about 35% of its sales during the month were for cash. Bennett has the following accounts receivable payment experience:

   Percent paid in the month of sale	25
   Percent paid in the month after the sale	68
   Percent paid in the second month after the sale	5

   Bennett's anticipated sales for the next few months are as follows:

   April	$250,000
   May	290,000
   June	280,000
   July	295,000
   August	300,000

   Required:

   1. Calculate credit sales for May.
   $

   Calculate credit sales for June.
   $

   Calculate credit sales for July.
   $

   Calculate credit sales for August.
   $

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   2. Prepare a schedule of cash receipts for July and August. Round your answers to the nearest whole dollar, if necessary. If an amount box does not require an entry, leave it blank or enter "0". Be sure to enter percentages as whole numbers.

   Bennett Inc. Schedule of Cash Receipts For July and August
   				July		August
   Cash sales				$		$
   Payments on account:
   From May credit sales:
   $ × %
   From June credit sales:
   $ × %
   $ × %
   From July credit sales:
   $ × %
   $ × %
   From August credit sales:
   $ × %
   Cash receipts				$		$

Answer 1

1. Calculate credit sales for May.
$290,000 * 65% = $188,500

Calculate credit sales for June.
$280,000 * 65% = $182,000

Calculate credit sales for July.
$295,000 * 65% = $191,750

Calculate credit sales for August.
$300,000 * 65% = $195,000

Bennett Inc. Schedule of Cash Receipts For July and August
				July		August
Cash sales				$103,250 ($295,000*35%)		$105,000 ($300,000*35%)
Payments on account:
From May credit sales:
$188,500*5%				$9,425
From June credit sales:
$182,000*68%				$123,760
$182,000*5%						$9,100
From July credit sales:
$191,750*25%				$47,938
$191,750*68%						130,390
From August credit sales:
$195,000*25%						48,750
Cash receipts				$284,373		$293,240