Question

# The Uli Antique Mall budgeted credit sales in the first quarter of 2018 to be as...

The Uli Antique Mall budgeted credit sales in the first quarter of 2018 to be as follows:

 January \$199,000 February 211,000 March 226,000

Credit sales in December 2017 are expected to be \$274,000. The company expects to collect 81 percent of a month’s sales in the month of sale and 19 percent in the following month.

Estimate cash receipts for each month of the first quarter of 2018.

 Collection of credit sales January February March Collection of December sales \$ \$ \$ Collection of January sales Collection of February sales Collection of March sales \$ \$ \$

 Ans. Schedule of Expected Cash Collection Collection of credit sales January February March Collection of December sales \$52,060 Collection of January sales \$161,190 \$37,810 Collection of February sales \$170,910 \$40,090 Collection of March sales \$183,060 Total cash collection \$213,250 \$208,720 \$223,150 Calculation of Cash collections: January February March Collection of December sales \$274,000 * 19% Collection of January sales \$199,000 * 81% \$199,000 * 19% Collection of February sales \$211,000 * 81% \$211,000 * 19% Collection of March sales \$226,000 * 81% *19% of the credit sales of March month will be collected in April.