Question

Shadee Corp. expects to sell 620 sun visors in May and 310 in June. Each visor sells for $17. Shadee’s beginning and ending finished goods inventories for May are 80 and 45 units, respectively. Ending finished goods inventory for June will be 60 units.

It expects the following unit sales for the third quarter:      

July	545
August	440
September	430

Sixty percent of Shadee’s sales are cash. Of the credit sales, 50 percent is collected in the month of the sale, 39 percent is collected during the following month, and 11 percent is never collected.

Required:

Calculate Shadee’s total cash receipts for August and September. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)

Answer 1

Answer:-

Shadee Corp.
Schedule of total cash receipts
Particulars	August	September
	$	$
Total sales (a)	440 units*$17 =7480	430 units*$17 =7310
Cash sales (b=60% of a)	4488	4386
Credit sales (c =40% of a)	2992	2924
Total Collections (d)
July collections	(545 units*$17 =9265)*40%*39% =1445.34	0
August collection	2992*50%=1496	2992*39%=1166.88
September Collections	0	2924*50% =1462
Total cash collections (e=b+d)	7429	7015