[xphluidx]

Ok, So I understand the examples in my text book. This problem has me stumped because there are no units listed so I cannot do the sales budget correct?

The Best Company operates a chain of small shops that are located in prime vacation towns. Best is considering operating a new store on July 1, 2010. Best’s president recently attended a business seminar that explained how formal budgets could be useful in judging the new store’s likelihood of succeeding. Assume you are the company’s accountant. The President has asked you to provide sample reports that show the new store’s operating expectations for the first three months (July, August and September).

1. Prepare a sample sales budget and a schedule of expected cash receipts using the following assumptions.
a. Best estimates July sales will be $400,000 of which $100,000 will be cash and $300,000 will be credit.
b. The ratio of cash sales to sales on account is expected to remain constant over the three-month period.
c. The company expects sales to increase 10% per month.
d. The company expects to collect 100 % of the accounts receivable generated by credit sales in the month following the sale.
e. Use this information to determine the amount of accounts receivable that Best would report on the September 30 pro forma balance sheet and the amount of sales it would report on the first quarter pro forma income statement.



Thank you for any help!

[ROLCAM]

Are you aware that we are not allowed to do these exercises for you.
It is not all that hard.
Have a go and let us see what you can actually do.
If you have EXCEL , use it.

Rolcam