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CAT Co. had forecasted sales as follows: -April: $406,000 -May: $452,000 -June: $496,000 Sales are 30%...

CAT Co. had forecasted sales as follows:

-April: $406,000

-May: $452,000

-June: $496,000

Sales are 30% credit and 70% cash.

50% of the credit sales are collected in the month of the sale, 30% in the month following the sale, and 20% in the following month.

Total sales for the months of February and March were $950,000 with February having $500,000 credit sales and March $400,000.

Prepare a sales budget schedule and a cash collections budget schedule for the months of April, May, and June

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Answer:-

Sales Budget Schedule
Particulars April May June Total
Projected monthly sales $ (a) 406000 452000 496000 1354000
Cash sales (b= 70%*a) 284200 316400 347200 947800
Credit Sales (30%*a) 121800 135600 148800 406200
Cash Collection Budget Schedule
Cash Collection April May June Total
50% in month of sale 121800*50%=60900 135600*50%=67800 148800*50%=74400 203100
30% in following month of sale 400000*30%=120000 121800*30%=36540 135600*30%=40680 197220
20% in the second month following sale 500000*20%=100000 400000*20%=80000 121800*20%=24360 204360
Total cash collections (c) 280900 184340 139440 604680
Total collection (d=b+c) 565100 500740 486640 1552480
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