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ACCT- Splendid Stereo, Inc., is a large retailer of stereo equipment




Question;Splendid Stereo, Inc., is a large retailer of stereo equipment. The controller is about toprepare the budget for the first quarter of 20x5. Past experience has indicated that 75 percentof the store's sales are cash sales. The collection experience for the sales on account is asfollows:80 percent during month of sale15 percent during month following sale5 percent uncollectibleThe total sales for December 20x4 are expected to be $380,000. The controller feels thatsales in January 20x5 could range from $200,000 to $320,000.Required:1.Demonstrate how financial planning can be used to project cash receipts inJanuary of 20x5 for three different levels of January sales.Total Salesin January,20x5$200,000Cash receiptsin January,20x5:FromDecembersales onaccountFromJanuary cashsalesFromJanuary saleson accountTotal cashreceipts$260,000$320,000


Paper#43741 | Written in 18-Jul-2015

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