Question

Bennett Inc. found that about 25% of its sales during the month were for cash. Bennett has the following accounts receivable payment experience:

Percent paid in the month of sale	25
Percent paid in the month after the sale	68
Percent paid in the second month after the sale	5

Bennett's anticipated sales for the next few months are as follows:

April	$250,000
May	290,000
June	280,000
July	295,000
August	300,000

Required:

1. Calculate credit sales for May.
$

Calculate credit sales for June.
$

Calculate credit sales for July.
$

Calculate credit sales for August.
$

2. Prepare a schedule of cash receipts for July and August. Round your answers to the nearest whole dollar, if necessary. If an amount box does not require an entry, leave it blank or enter "0". Be sure to enter percentages as whole numbers.

Bennett Inc. Schedule of Cash Receipts For July and August
				July		August
Cash sales				$		$
Payments on account:
From May credit sales:
$_____ ×  %______
From June credit sales:
$______ ×  %_______
$ _____×  %_______
From July credit sales:
$_______ ×  %_______
$________ ×  %______
From August credit sales:
$ _____×  %_____
Cash receipts				$		$

Answer 1

1. Cash sales in the month accounts for 25%, therefore 75% is the credit sales in the respective month.

Credit sales for May: 2,90,000 x 75% = 2,17,500

Credit sales for June: 2,80000 x 75% = 2,10,000

Credit sales for July: 2,95,000 x 75% = 2,21,250

Credit sales for August: 3,00,000 x 75% = 2,25,000

2. Schedule of cash reciepts for July and August

Please comment in case of any doubts.

Kindly rate the answer. Thank you :-)