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4. The Khaki Company has the following budgeted sales data: January February March April Credit Sales...

4. The Khaki Company has the following budgeted sales data: January February March April Credit Sales $350,000 $320,000 $400,000 $360,000 Cash Sales $70,000 $90,000 $80,000 $70,000 The regular pattern of collection of credit sales is 30% in the month of sales, 25% in the month following sales, and the remainder in the second month following the month of sale. There are no bad debts. Required: a. Determine budgeted cash receipts for April. b. Determine budgeted accounts receivable balance on March 31,

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Answer #1

a.

Schedule of Budgeted Cash Collection For April
Cash sales 70,000
Cash collection from February credit sale (320,000 x 45%) 144,000
Cash collection from March credit sale (400,000 x 25%) 100,000
Cash collection from April credit sale (360,000 x 30%) 108,000
Total cash receipts $422,000

budgeted cash receipts for April = $422,000

b.

Accounts receivable on March 31= 45% of credit sales of February + 70% of Credit sales of March

= 320,000 x 45% + 400,000 x 70%

= 144,000+280,000

= $424,000

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