XYZ Company usually sells about 40% of its merchandise during a month for cash, 40% collected in the month after sale, and 10% in two months after the sale – 10% of the sales are never collected. Total budgeted sales for the second quarter are as follows:
April |
$200,000 |
May |
100,000 |
June |
150,000 |
Assume all questions relate to the month of June.
1. |
What are the expected receipts in June from accounts receivable for sales made in April? |
2. |
What are the expected receipts in June from accounts receivable for sales made in May? |
3. |
What are the total expected cash receipts in June? |
Answer 1 | |||||||
The expected receipts in June from accounts receivable for sales made in April = April sales * 10% = $200000 * 10% = $20,000 | |||||||
Answer 2 | |||||||
The expected receipts in June from accounts receivable for sales made in May = May Sales * 40% = $100000 * 40% = $40,000 | |||||||
Answer 3 | |||||||
The total expected cash receipts in June | |||||||
April sales collection | $20,000 | ||||||
May sales collection | $40,000 | ||||||
June sales collection [$150000 * 40%] | $60,000 | ||||||
Total expected cash receipts in June | $120,000 | ||||||
Get Answers For Free
Most questions answered within 1 hours.