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    Apr 28, 2012, 12:31 PM
    Cash budget-accounting 2
    Rich company's experience shows that 20% of its sales are for cash and 80% are on credit. An analysis of credit sales shows that 50% are collected in the month following the sale, 45% are collected in the second month, and 5% prove to be uncollectible. Calculate items (1) through (10) below:

    Sales

    August... $500,000
    September... $525,000
    October... $535,000
    November... $560,000

    1. Receipts from cash sales for October and November
    2. Collections from August credit sales for October and November
    3. Collections from September credit sales for October and November
    4. Collections from October credit sales for October and Novmeber
    5. Total cash collections during the month for October and November

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