[Bubbles4]

Bates Corporation has prepared the following sales budget:
Month Expected Sales
May $84000
June $100000
July 92000
August 116000
September 98000
Credit sales are 80% of total sales. Collections are 80% in the month of sale, 15% in the month following the sale. The ramaining 5% is expected to be uncollectible.

Prepare a schedule of cash collections for June through August

[pready]

For May you first have to calculate the cash received from the sale, which is 20% times total sales. This means that 80% of total sales are credit sales. Next you have to caculate the collection of the credit sales for the month, whicn is 80% times credit sales. For each month you will perform these calculations.

For the other months you need to calculate the collections from the previous month's credit sales, which is 15% times the previous month's credit sales.

Now you add the collections for each month to get your monthly collection amounts