Solution-Prepare a schedule of budgeted cash collections

Prepare a schedule of budgeted cash collections

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Reference no: EM131772458

Problem - Cash Receipts

The sales budget for Perrier Inc. is forecasted as follows:

Month	Sales Revenue
May	$120,000
June	160,000
July	180,000
August	120,000

To prepare a cash budget, the company must determine the budgeted cash collection from sales. Historically, the following trend has been established regarding cash collection of sales:

60 percent of the month of sale
20 percent in the month following sale
15 per cent in the second month following sale
5 percent uncollectible

The company gives a 2 percent cash discount for payments made by customers during the month of sale. The accounts receivable balance on April 30 is $24,000, of which $7,000 represents uncollected March sales and $17,000 represents uncollected April Sales.

Prepare a schedule of budgeted cash collections from sales for May, June, and July. Include a three-month summary of estimated cash collections.

Reference no: EM131772458

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Prepare a schedule of budgeted cash collections

Reference no: EM131772458

Reference no: EM131772458

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