Question

# 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

 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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