Question

Panora Organization manufactures and sells industrials products. For 2017, Panora has budgeted the following sales: Quarter...

Panora Organization manufactures and sells industrials products. For 2017, Panora has budgeted the following sales:

Quarter 1 $4,600,000
Quarter 2 5,100,000
Quarter 3 5,000,000
Quarter 4 7,600,000

In Panora's experience regarding sales on account, 75% are collected in the quarter of sale, and 22% are collected in the quarter following the sales. 3% are never collected. Total sales for the current third quarter is $4,900,000 and for the current fourth quarter is $6,850,000.


Construct a cash receipts budget for Panora Organization for the upcoming year, showing the cash sales and cash collections from credit sales.

Business   Accounting   
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Answer #1
Particulars Qtr-1 Qtr-2 Qtr-3 Qtr-4
Budgeted total sales 46,00,000 51,00,000 50,00,000 76,00,000
75% recovered in the same quarter (A) 34,50,000 38,25,000 37,50,000 57,00,000
22% of previous quarter recovered in current quarter (B) 15,07,000 10,12,000 11,22,000 11,00,000
Total budgeted cash receipts 49,57,000 48,37,000 48,72,000 68,00,000

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