Question

Shadee Corp. expects to sell 550 sun visors in May and 440 in June. Each visor sells for $17. Shadee’s beginning and ending finished goods inventories for May are 75 and 45 units, respectively. Ending finished goods inventory for June will be 60 units.

It expects the following unit sales for the third quarter:

July	545
August	440
September	430

Sixty percent of Shadee’s sales are cash. Of the credit sales, 50 percent is collected in the month of the sale, 36 percent is collected during the following month, and 14 percent is never collected.

Required:

Calculate Shadee’s total cash receipts for August and September.r. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)

Answer 1

	August	September
Total cash receipts	7318	6925

Workings:
	August	September
Cash sales	4488	4386
Credit sales:
July sales	1334
August sales	1496	1077
September sales		1462
Total cash receipts	7318	6925
	August	September
Cash sales	=440*17*60%	=430*17*60%
Credit sales:
July sales	=545*17*40%*36%
August sales	=440*17*40%*50%	=440*17*40%*36%
September sales		=430*17*40%*50%