Question

Aqua Gardens Forecasts sales as follows: June $100,000 July $150,000 August $75,000 All sales are made...

Aqua Gardens Forecasts sales as follows:

June $100,000

July $150,000

August $75,000

All sales are made on credit; 60% are collected in the month after the sale and 40% is collected in the second month after the sale.

May's sales were $50,000 and April's sales wer $40,000

Prepare a monthly schedule of cash receipts for June, July, and August.

What would be the accounts receivable balance at the end of August?

Homework Answers

Answer #1

June:

For June, 40% of April's sales will be received and 60% of May's sales will be received

Cash receipt = 0.4*40000 + 0.6*50000 = $46,000

July:

For July, 40% of May's sales will be received and 60% of June's sales will be received

Cash receipt = 0.4*50000 + 0.6*100000 = $80,000

August:

For August, 40% of June's sales will be received and 60% of July's sales will be received

Cash receipt = 0.4*100000 + 0.6*150000 = $130,000

Accounts Receivables balance at August end = August sales + 40% of July' sales = $75,000 + 0.4*150000 = $135,000

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Watt’s Lighting Stores made the following sales projection for the next six months. All sales are...
Watt’s Lighting Stores made the following sales projection for the next six months. All sales are credit sales. March $43,000 June $47,000 April 49,000 July 55,000 May 38,000 August 57,000 Sales in January and February were $46,000 and $45,000, respectively. Experience has shown that of total sales, 10 percent are uncollectible, 35 percent are collected in the month of sale, 45 percent are collected in the following month, and 10 percent are collected two months after sale. a. Prepare a...
Beech’s managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August,...
Beech’s managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $280,000, $300,000, $290,000, and $310,000, respectively. 2. All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July. 3. Each month’s ending inventory must equal 25%...
Cruises, Inc. has budgeted sales revenues as follows: June July August Credit Sales $135,000 $135,000 $90,000...
Cruises, Inc. has budgeted sales revenues as follows: June July August Credit Sales $135,000 $135,000 $90,000 Cash Sales 90,000 225,000 195,000 Total Sales $225,00 $380,000 $285,000 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Cash disbursements were $421,000 for July and $250,500 for August. The company wishes to maintain a minimum cash balance of $50,000 at the end of each...
DuPree Enterprises reported the following cash collections in July and August from credit sales: July August...
DuPree Enterprises reported the following cash collections in July and August from credit sales: July August From June receivables $ 41,000 From July sales 152,000 $ 38,000 From August sales 176,000 The company sells a single product for $20, and all sales are collected over a two-month period. Required: A. Determine the number of units that were sold in July. B. Determine the percent of credit sales collected in the month of sale and the percent of sales collected in...
Schedule of Cash Collections on Accounts Receivable and Cash Budget Roybal Inc. sells all of its...
Schedule of Cash Collections on Accounts Receivable and Cash Budget Roybal Inc. sells all of its product on account. Roybal has the following accounts receivable payment experience: Percent paid in the month of sale 20 Percent paid in the month after the sale 55 Percent paid in the second month after the sale 23 To encourage payment in the month of sale, Roybal gives a 2% cash discount. Roybal's anticipated sales for the next few months are as follows: April...
Roybal Inc. sells all of its product on account. Roybal has the following accounts receivable payment...
Roybal Inc. sells all of its product on account. Roybal has the following accounts receivable payment experience: Percent paid in the month of sale 20 Percent paid in the month after the sale 55 Percent paid in the second month after the sale 23 To encourage payment in the month of sale, Roybal gives a 2% cash discount. Roybal's anticipated sales for the next few months are as follows: April $209,000 May 272,800 June 286,000 July 264,000 August 330,000 Required:...
Beech’s managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August,...
Beech’s managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $210,000, $230,000, $220,000, and $240,000, respectively. 2. All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 45% in the month of sale and 55% in the month following the sale. All of the accounts receivable at June 30 will be collected in July. 3. Each month’s ending inventory must equal 20%...
Watt’s Lighting Stores made the following sales projection for the next six months. All sales are...
Watt’s Lighting Stores made the following sales projection for the next six months. All sales are credit sales. March...............................        $35,000 April.................................          41,000 May..................................          30,000 June.................................          39,000 July...................................          47,000 August..............................          49,000 Sales in January and February were $38,000 and $37,000, respectively. Experience has shown that of total sales, 10 percent are uncollectible, 30 percent are collected in the month of sale, 40 percent are collected in the following month, and 20 percent are collected two months after sale. Prepare a monthly cash receipts schedule for the firm...
The sales budget for Perrier Inc. is forecasted as follows: Month Sales Revenue May $130,000 June...
The sales budget for Perrier Inc. is forecasted as follows: Month Sales Revenue May $130,000 June 150,000 July 200,000 August 130,000 To prepare a cash budget, the company must determine the budgeted cash collections from sales. Historically, the following trend has been established regarding the cash collection of sales: 60 percent in the month of sale. 20 percent in the month following sale. 15 percent in the second month following sale. 5 percent uncollectible. The company gives a 2 percent...
Bennett Inc. found that about 45% of its sales during the month were for cash. Bennett...
Bennett Inc. found that about 45% of its sales during the month were for cash. Bennett has the following accounts receivable payment experience: Percent paid in the month of sale 25 Percent paid in the month after the sale 68 Percent paid in the second month after the sale 5 Bennett's anticipated sales for the next few months are as follows: April $250,000 May 290,000 June 280,000 July 295,000 August 300,000 Required: 1. Calculate credit sales for May. $ Calculate...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT