[dikmah]

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:

[ROLCAM]

july august september 3 months
_____________________________________

1,400,000 1,200,000 1,134,000 3,734,000

280,000 240,000 226,800 746,800

1,120,000 960,000 907,200 2,987,200

322,560 276,480 261,274 860,314
400,000 560,000 480,000 453,600
72,000 120,000 168,000 144,000
____________________________________
794,560 956,480 909,274 1,457,914
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