Question

E8-11 Calculating Cash Receipts [LO 8-4]

Shadee Corp. expects to sell 540 sun visors in May and 360 in June. Each visor sells for $13. Shadee’s beginning and ending finished goods inventories for May are 85 and 55 units, respectively. Ending finished goods inventory for June will be 65 units.

It expects the following unit sales for the third quarter:      

July	530
August	450
September	450

Sixty percent of Shadee’s sales are cash. Of the credit sales, 54 percent is collected in the month of the sale, 38 percent is collected during the following month, and 8 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

Shadee's total cash receipts for August and September are as follows:

Particulars	August	September
60% of current month's cash sales	3,510.00	3,510.00
38% of July's credit sales collected in August	1,047.28
54% of August's credit sales collected in August	1,263.60
38% of August's credit sales collected in September		889.20
54% of September's credit sales collected in September		1,263.60
Total Cash receipts	5,821	5,663