Question

Crew Clothing (CC) sells women's resort casual clothing to high-end department stores and in its own retail boutiques. CC expects sales for January, February, and March to be $460,000, $520,000, and $540,000, respectively. Twenty percent of CC's sales are cash, with the remainder collected evenly over two months. During December, CC's total sales were $770,000. CC is beginning its budget process and has asked for your help in preparing the cash budget. Compute CC's expected cash receipts from customers for each month. January February March Budgeted Cash Receipts

Answer 1

	January	February	March
Cash sales	92000	104000	108000
Credit sales:
Prior month	308000	184000	208000
Current month	184000	208000	216000
Budgeted cash receipts	584000	496000	532000
Workings:
	January	February	March
Cash sales	=460000*20%	=520000*20%	=540000*20%
Credit sales:
Prior month	=770000*80%*50%	=460000*80%*50%	=520000*80%*50%
Current month	=460000*80%*50%	=520000*80%*50%	=540000*80%*50%