dikmah
Apr 9, 2009, 02:13 AM
Management of Minota Company is gathering data to prepare a cash budget for 2004. The following information is available so far.
Total Sales
April $460,000
May $600,000
June $1,000,000
July $1,140,000
August $1,200,000
September $1,134,000
Of all sales, 20% are for cash. For credit sales, 30% are collected within the month of the sale, 50% are collected in the first month following the sale, and 15% are collected in the second month following the sale. The remaining sales are uncollectible. Half of the credit sales collected during the month of the sale receive a 8% cash discount.
Required:
Prepare a schedule of cash collections for the third quarter (July – September) of 2004. Show cash collections by month and in total for the quarter.
MY ANSWER
June July aug sept
Cash (20%) 1,000,000 228,000 240,000 226,800
+collection of credit sales 342,000 360,000 340,200
Current mth (30%)
- cash discount 8% 27,360 28,800 27,216
+ cllction of crdt sls
Last mth 50% 500,000
+ cllctn of crdt sls
2 mth ago (15% of 2 mth ago) 90,000
TOTAL 1,132,640 571,200 539,784
It is correct really need your comment. :), the remaining mth are uncollectible rite so prepared for July because it give the info, is it correct:confused:
Total Sales
April $460,000
May $600,000
June $1,000,000
July $1,140,000
August $1,200,000
September $1,134,000
Of all sales, 20% are for cash. For credit sales, 30% are collected within the month of the sale, 50% are collected in the first month following the sale, and 15% are collected in the second month following the sale. The remaining sales are uncollectible. Half of the credit sales collected during the month of the sale receive a 8% cash discount.
Required:
Prepare a schedule of cash collections for the third quarter (July – September) of 2004. Show cash collections by month and in total for the quarter.
MY ANSWER
June July aug sept
Cash (20%) 1,000,000 228,000 240,000 226,800
+collection of credit sales 342,000 360,000 340,200
Current mth (30%)
- cash discount 8% 27,360 28,800 27,216
+ cllction of crdt sls
Last mth 50% 500,000
+ cllctn of crdt sls
2 mth ago (15% of 2 mth ago) 90,000
TOTAL 1,132,640 571,200 539,784
It is correct really need your comment. :), the remaining mth are uncollectible rite so prepared for July because it give the info, is it correct:confused: