Roswell Company has budgeted sales revenue as follows for the next 4 months as follows Answer
Roswell Company has budgeted sales
revenue as follows for the next 4 months as follows:
|
February |
$150,000 |
|
March |
$120,000 |
|
April |
$105,000 |
|
May |
$165,000 |
Past experience indicates that 80% of sales each month are on credit and that
collection of credit sales occurs as follows: 60% in the month of sale, 35% in
the month following the sale, and 3% in the second month following the sale.
The other 2% is uncollectible.
Prepare a schedule which shows expected cash receipts from sales for the month
of May. (Points : 30)
| May | |||
| Cash sales | 33000 | 165000*.2 | |
|
60% of May credit sales |
79200 | 165000*.8*.6 | |
|
35% Of April credit sales |
29400 | 105000*.8*.35 | |
|
3% of March credit sales |
2880 | 120000*.8*.03 | |
|
Total collection in May |
144480 |
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