Description of this paper

To prepare a cash budget, the company must determine the budgeted cash collections from sales

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solution


Question

Cash Receipts;The sales budget for Perrier Inc. is forecasted as follows;Month;Sales Revenue;May $100,000;June 170,000;July 180,000;August 120,000;To prepare a cash budget, the company must determine the budgeted cash collections from sales. Historically, the following trend has been established regarding cash collection of sales;?60 percent in the month of sale.;?20 percent in the month following sale.;?15 percent in the second month following sale.;?5 percent uncollectible.;The company gives a 1 percent cash discount for payments made by customers during the month of sale. The accounts receivable balance on April 30 is $27,000, of which $6,000 represents uncollected March sales and $21,000 represents uncollected April sales. Prepare a schedule of budgeted cash collections from sales for May, June, and July. Include a three-month summary of estimated cash collections.;Perrier, Inc.;Schedule of Budgeted Cash Collections;Quarterly by Months;May;June;July;Total;Total Cash receipts

 

Paper#24478 | Written in 18-Jul-2015

Price : $27
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