Cash receipts budget and accounts receivable aging schedule

Assignment Help Financial Management

Reference no: EM131985262

(Algorithmic) Cash Receipts Budget and Accounts Receivable Aging Schedule Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales: Quarter 1 $4,700,000 Quarter 2 5,230,000 Quarter 3 6,680,000 Quarter 4 8,590,000 In Shalimar’s experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $5,710,000 and for the fourth quarter of the current year are $7,170,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. Quarter Cash Sales Credit Sales 3, current year $ $ 4, current year 1, next year 2, next year 3, next year 4, next year 2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. If an amount is zero, enter "0". Shalimar Company Cash Receipts Budget For the Coming Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 Cash sales $ $ $ $ Received on account from: Quarter 3, current year Quarter 4, current year Quarter 1, next year Quarter 2, next year Quarter 3, next year Quarter 4, next year Total cash receipts $ $ $ $ 3. What if the recession led Shalimar’s top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assumed to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption. Shalimar Company Cash Receipts Budget For the Coming Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 Cash sales $ $ $ $ Received on account from: Quarter 4, current year Quarter 1, next year Quarter 2, next year Quarter 3, next year Quarter 4, next year Total cash receipts $ $ $ $.

Reference no: EM131985262

Questions Cloud

What was cash flow to stockholders : What was the cash flow from assets for 2015? If no new debt was issued during the year, what was the cash flow to stockholders?

Financial differences between the firms and continuing : Conduct internet search on the two firms to gain additional insights as to causes of financial differences between the firms in 2008 and continuing into 2009.

Conduct an analysis of their retirement planning : Conduct an analysis of their retirement planning needs and provide them with a professionally written letter.

What are his resulting monthly mortgage payments : What are his resulting monthly mortgage payments. Can he afford the mortgage?

Cash receipts budget and accounts receivable aging schedule : (Algorithmic) Cash Receipts Budget and Accounts Receivable Aging Schedule Shalimar Company manufactures and sells industrial products.

Calculate profitability-index using incremental cash flows : Calculate the profitability-index using the incremental cash flows.

Considering two ways of financing spring break vacation : You are considering two ways of financing a spring break vacation.

Assume semiannual compounding periods : If the yield to maturity on this bond is 6.77 percent, what is the price of the bond? Assume semiannual compounding periods.

Raise revenue to support their capital improvements plan : Assume a local government has determined they will increase taxes in order to raise revenue to support their capital improvements plan.

User Account

All Pages