Question

Shadee Corp. expects to sell 590 sun visors in May and 390 in June. Each visor sells for $11. Shadee’s beginning and ending finished goods inventories for May are 65 and 50 units, respectively. Ending finished goods inventory for June will be 50 units.

It expects the following unit sales for the third quarter:

July	560
August	460
September	440

Sixty percent of Shadee’s sales are cash. Of the credit sales, 54 percent is collected in the month of the sale, 36 percent is collected during the following month, and 10 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

	July	August	September
Budgeted sales in units (a)	560	460	440
Budgeted selling price per unit (b)	$11	$11	$11
Budgeted Sales Revenue in dollars (a*b)	$6,160	$5,060	$4,840
	August	September
Cash sales ($5,060*60/100); ($4,840*60/100)	$3,036	$2,904
Cash collections from credit sales:
From July sales ($6,160*40/100*36/100)	$887
From August sales ($5,060*40/100*54/100); ($5,060*40/100*36/100)	$1,093	$729
From September sales ($4,840*40/100*54/100)		$1,045
Total Cash Receipts	$5,016	$4,678