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Prepare budget for collecting receivables in January

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Reference no: EM132550606

Question - Following are the estimated sales value data for 2020.

January 2020 7,000,000

February 2020 10,000,000

March 2020 8,000,000

Based on experience, cash sales every month is 44% and gets a discount of 2%, while the remaining credit sales.

The pattern of collecting receivables from credit sales is estimated as follows:

- 50% in the month of the sale

- 50% in the first month of the sale

Based on the above data you are asked to:

a. Prepare budget for collecting receivables in January, February and March 2020.

b. Prepare budget for cash receipts (from cash and credit sales) in January, February and March 2020.

Reference no: EM132550606

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