Question

Dubai Trade Corporation has prepared the following 2020 sales budget:

                        Month                     Cash Sales      Credit Sales

                        May                               $16,000             $68,000

                        June                                20,000               80,000

                        July                                 18,000               74,000

                        August                            24,000               92,000

                        September                       22,000               76,000

Collections are 40% in the month of sale, 45% in the month following the sale, and 10% two months following the sale. The remaining 5% is expected to be uncollectible. The company also made sure that all outstanding balances owed by customers from November and December 2019 were paid before the end of December 2019

Prepare a schedule of cash collections for July through September 2020. Please fill in the below table

needed quick

Answer 1

Schedule of cash collections
Particulars	July	August	September
Cash sales for the month (A)	$18,000	$24,000	$22,000
Collections on credit sales:
40% of current month's credit sales	$29,600	$36,800	$30,400
45% of previous month's credit sales	$36,000	$33,300	$41,400
10% of last to last month's credit sales	$6,800	$8,000	$7,400
Total collections on credit sales (B)	$72,400	$78,100	$79,200
Total cash collections during the month (A + B)	$90,400	$102,100	$101,200