Question

Shadee Corp. expects to sell 630 sun visors in May and 360 in June. Each visor sells for $16. Shadee’s beginning and ending finished goods inventories for May are 75 and 55 units, respectively. Ending finished goods inventory for June will be 70 units.

It expects the following unit sales for the third quarter:      

July	530
August	460
September	430

Sixty percent of Shadee’s sales are cash. Of the credit sales, 52 percent is collected in the month of the sale, 35 percent is collected during the following month, and 13 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

	August	September
Cash sales	4416	4128
Credit sales:
July sales	1187	0
August sales	1531	1030
September sales		1431
Total cash receipts	7134	6589
Workings:
August:
Cash sales = 460*16*60%=$4416
Credit sales:
July sales = 530*16*40%*35%
August sales = 460*16*40%*52%
September:
Cash sales = 430*16*60%=$4128
Credit sales:
August sales = 460*16*40%*35%=$1030
September sales = 430*16*40%*52% = $1431